86% of schemes face 'significant' changes to ensure Code of Practice compliance

The majority (86 per cent) of trustees think they will need to make significant changes to comply with The Pension Regulator’s (TPR) proposed new Code of Practice, according to research from Barnett Waddingham.

The provider undertook a survey both before and after a presentation on the new Code of Practice, which resulted in a 23 per cent swing, with just 63 per cent of attendees expecting to face significant changes as a result of the code of practice prior to the session.

In addition to this, 21 per cent of attendees thought the changes would not be significant prior to the session, whilst 16 per cent of respondents did not know what changes would be required at all.

Barnett Waddingham said that the findings have prompted questions as to whether trustees "truly understand" what is involved.

Indeed, the survey also found that whilst 43 per cent of respondents expect advisers to lead work on this project, one third (33 per cent) believe it will be the trustee board.

Furthermore, despite TPR’s increased focus on environmental, social and governance (ESG) factors in investment strategies, 50 per cent of those surveyed have not reviewed their scheme’s exposure to ESG risks.

Roughly six out of seven respondents stated that they would look at this in the next 12 months, leaving one in seven who had no plans to consider this at present.

Commenting on the findings, Barnett Waddingham principal and senior pension management consultant, Sara Cook, stated: “Governance can be a word that switches people off but this is all really about risk management and ultimately better member outcomes. What remains to be seen is how proportionate schemes are allowed to be.

“The volume of what the regulator seems to be asking schemes to do could frustrate their ability to focus resource on the highest risk and strategic issues that really make the difference.

“Trustees should be setting aside some agenda time now to start considering how the code impacts their existing processes and risk management framework.

“For some that might be additional planning and resource with the right skills to ensure they comply with the final code.”

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