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UK pensions schemes must improve or consolidate

Proposals to reduce the number of poorly governed pension schemes have been outlined in a consultation launched by The Pensions Regulator (TPR). The future of trusteeship and governance consultation outlines the problem of badly run pension schemes and considers how the trustee model can be made more effective.

It poses questions to the industry about how to improve and prove trustee knowledge and understanding, how to encourage diversity on boards, the role of accreditation and whether sole trustees are able to govern effectively.

David Fairs, Executive Director of Regulatory Policy, Analysis and Advice at TPR, said: “The trustee model isn’t broken, but it does need to be greatly improved. There is stark evidence that the current system doesn’t work for all and there is a clear disparity between the experience of savers in well-run and badly-run schemes. If trustees cannot meet the standards we expect, we believe they should wind up and consolidate savers into a better run scheme.”

The consultation period closes on 24 September. Questions posed to the pensions industry in the 30-page consultation include:

  • Should there be an accredited professional trustee on every board? 
  • Are sole trustees on a pensions’ board able to run pension schemes appropriately?
  • How can barriers to consolidation be removed?
  • Should a legal requirement be brought in for trustees to meet minimum standards of knowledge and understanding and ongoing learning?
  • How can diversity on pension scheme boards be improved?

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