59% of trustees frustrated by lack of clarity on governance boundaries

Greater clarity over governance boundaries is needed, Sackers has warned, after its recent webinar poll revealed that 59 per cent of pension scheme trustees are frustrated by the lack of clarity between a legal obligation, The Pension Regulator's expectation, and a “nice to have".

The findings come amid TPR’s ongoing efforts to consolidate 10 of its 15 existing codes, with the regulator's consultation on the single code of practice currently ongoing.

Commenting on the findings, Sackers partner, Helen Baker, said: “In bringing 10 of its 15 existing codes under one roof, TPR’s aim is to create a clearer, more accessible single code of practice.

“The code is intended to be user-friendly and to make it easier for trustees, and those advising them, to distinguish between a legal obligation on the one hand and a TPR expectation on the other.”

In particular, Baker noted that by adopting government communication principles in its use of language to distinguish between legal duties (‘must’), and TPR’s expectations (‘should’), TPR is "clearly taking steps to achieve this".

"But ‘need’ is also used where there is neither a legal obligation nor an expectation as such, and this is causing concern," she clarified.

“As our survey has shown, end users are desperately seeking greater clarity as to what is a legal obligation, a TPR expectation, or simply a ‘nice to have’, as this is key to understanding what is actually required. We very much hope that TPR will bear this in mind when crafting the final code.”

Baker also noted that TPR plans to carry out a series of engagement activities with more details about the new code, providing the industry with the opportunity to share its views.

“Given the complexity involved in assembling so many codes under one roof, we recommend trustees proactively engage with TPR on all aspects of the new code so as to help ensure that it is as workable as possible when it eventually comes into force later this year,” she added.

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