PLSA publishes chair’s statement template

The Pensions and Lifetime Savings Association (PLSA) has published a new template to help defined contribution (DC) scheme trustees in producing their annual chair’s statement.

DC schemes are legally required to submit an annual statement which includes the scheme’s investment strategy, its governance, the processing of core financial transactions, the disclosure of members’ costs and charges, and how trustees have met knowledge and understanding requirements.

The PLSA works with several legal firms and advisers in designing the template as some its members had raised concerns about how some of the legislative requirements regarding the statement are being applied in practice.

Commenting on the template, PLSA DC Committee chair, Laura Myers, said: “This has long been a concern for trustees and that’s why I am delighted to have contributed to this template statement.

"It will hopefully provide a useful starting point and guide for trustees to help simplify the production time and cost on documenting their governance so they can instead focus these costs on the areas that will make tangible improvements to members’ outcomes.”

The PLSA’s new template is based on the requirements of regulation 23 of The Occupational Pension Schemes (Scheme Administration) Regulations 1996, as at 1 February 2020, and has the support of The Pensions Regulator (TPR).

“A chair’s statement is a basic requirement of good pensions governance and should be written clearly enough for members to understand and so I welcome any assistance provided to the trustees such as the PLSA’s drafting template,” added TPR executive director of regulatory policy, analysis and advice, David Fairs.

“The template doesn’t remove the need for trustees to carry out the fundamental analysis forming the foundation for a chair’s statement or consider how the statement requirements apply in the case of their scheme, but it should help in collating the information needed and help to present this clearly to savers.”

Sackers were one of the legal firms participating in the development of the template. Its head of DC and DC Governance Group founding member, Helen Ball, said that it should be a useful starting point for trustees who are "uncertain of how they should meet requirements", and that it can “help reduce the production time and costs” associated with their statements.

“It is not intended to replace the good work done by many schemes over the past few years in forming their own chair’s statement ‘style’, but this will be a really useful tool to supplement and support it,” she concluded.

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