One of the growing trends in pensions governance has been the use of professional trustees. Professional trustees bring expertise and independence to the role, which can be particularly beneficial for schemes with complicated funding issues, or a history of compliance problems.
However, until recently, an area of concern has been the absence of any formal regulatory structure for professionals. Given that six years have elapsed since the GP Noble scandal, effective regulation is long overdue, if employers are to have appropriate guarantees concerning those that they appoint to provide effective governance for their schemes.
Following its 21st Century Trusteeship initiative, The Pensions Regulator (TPR) has been working closely with industry bodies to develop formal protocols to govern the conduct of professional trustees.
A working group made up of representatives from the APPT, PLSA, TACT, PMI and TPR has been formed to agree appropriate standards. It has considered such standards as professional qualifications, CPD requirements, and PI cover, and it is to be expected that ultimately the industry as a whole will have standards that will provide confidence to all who appoint professional trustees to manage their schemes. Chaired by Andrew Bradshaw of the APPT, it hopes to have finalised its deliberations later this year.
With professionals taking on an expanding role in serving as trustees for the UK’s pension schemes, formal protocols governing their conduct are vital. TPR is to be congratulated for ensuring that this requirement has been properly addressed.