The Pensions Regulator has announced its plan to launch a governance drive next year to clarify its expectations of schemes.

TPR is set to launch a targeted education and enforcement drive in spring 2017 to highlight its expectations and view on what ‘good looks like’.

It will also use data to target its communication approach and tailor its methods to scheme size, type and compliance history.

TPR today published a response to its 21st Century trusteeship and governance discussion paper which looked to encourage debate among the industry on how the governance and administration failings in the sector could be addressed.

From the 74 responses received, common themes included the view that good governance is vital as well as widespread support for TPR’s increased focus on increasing standards. They also agreed that regular evaluation, assessment and reporting would be helpful in achieving good governance and requested simplified, streamlined and consolidated guidance for trustees.

However, there was minimal support for mandatory qualifications, rather, respondents said that knowledge and skills of the board as a whole should be considered rather than the knowledge or skill of a single individual.

Furthermore, it was also suggested to the TPR that where schemes don’t reach expected levels of governance, those schemes should be targeted directly rather than placing the burden across all schemes.

TPR executive director for regulatory policy Andrew Warwick-Thompson, said: “We know there are many highly experienced and skilled trustees, and some schemes are managed very effectively. However, too many occupational pension scheme members and sponsors are suffering financial detriment from poor stewardship.

“There are some trustees who are not responding to our guidance and calls for higher standards. We are not prepared to accept two classes of scheme member – those that benefit from good governance and administration, and those that do not.

“In 2017 we will set out clearly the higher standards we expect of a professional trustee and define what we mean by a ‘professional trustee’. Further, recognising that the most effective boards have a diversity of skills, we will continue to encourage and support lay trustees through the development of the Trustee toolkit and targeted guidance and self-help tools.

“We have a range of powers already – the appointment of an independent trustee or skilled person, improvement notices, and the suspension or prohibition of a trustee. We also believe that in some circumstances scheme consolidation may be the most appropriate strategy and we are open minded about the longer-term solutions, which is why we are so keen to engage with stakeholders and the wider industry.”

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