The Pensions Regulator has today, 10 August 2017, unveiled its revised professional trustee description and a new monetary penalties policy.
In its professional trustee outline, the regulator provides a detailed description and examples of when it may consider someone to be a professional trustee. Individuals will be considered as a professional trustee if they have represented themselves to one of more unrelated schemes as having expertise in trustee matters generally and are likely to be given higher penalties under the penalties policy, TPR explained.
The new description also looks to increase standards and accreditation for professional trustees through the Professional Trustee Standards Working Group. The group is working to develop higher standards for professional trustees.
Moreover, TPR’s monetary penalties policy explains how it will use its powers to impose penalties under pensions legislation. These include discretionary penalties imposed on individuals, mandatory penalties and other enforcement action it is able to take if monetary penalties are not met, in order to remedy the underlying breach.
The regulator explained that its penalty principles are: the penalty should be proportionate to the nature of the breach and any harm caused (eg the number of members affected and/or the level/significance of detriment), the amount of the penalty should aim to change the behaviour of the person in breach and the penalty should aim to deter repetition of the breach among the wider regulated community.
As part of the consultation representative and professional bodies, trustees, pension providers and advisers were asked to comment on TPR#s proposed approach earlier this year. It also asked for views on how monetary penalties are imposed.
Respondents to the consultation were mostly supportive of TPR’s approach and of the different penalties for professional and lay trustees, TPR said.
The regulator’s publication of these policies is part of its drive to improve standards of trusteeship and governance; ultimately in order to achieve good member outcomes.
TPR acting executive director for regulatory policy Anthony Raymond, said: “It is vital that trustees have the right skills to ensure that their pension scheme is managed effectively but it is also right that they are held to account if they fail to provide proper governance.
“Professional trustees bring real benefits to a board through their expertise and experience, sharing knowledge and good practice from other schemes.
“Our role is to protect members’ benefits and the policy sets out who we will consider to be a professional trustee and hold to a higher standard. We want to see good quality professional trustees who improve the governance of pension schemes and the standards developed through the PTSWG will help employers and trustees know what to look for when appointing a professional trustee.”
TPR has said it will publish regular bulletins setting out how it has used its powers, including monetary penalties it has applied.