Almost two-thirds (65 per cent) of pension schemes think The Pensions Regulator’s (TPR) new single Code of Practice will lead to major changes in scheme governance processes over the next two years, according to a study by WTW.

TPR’s new single Code of Practice is due to come into force later this year and will require all schemes with 100 or more members to adhere to new risk, governance, and effectiveness practices.

WTW’s latest Trustee DB Governance DB Survey showed that many pension schemes are concerned about their ability to meet the requirements of the new code.

Nearly two-thirds (61 per cent) think it will take significant time and resource to become compliant, while 22 per cent think the new requirements will add value to their scheme’s governance.

However, the survey also revealed that 25 per cent of schemes have yet undertaken training in the new single code’s requirements, and even fewer (13 per cent) have yet undertaken a gap analysis to discover where their scheme governance is lacking, relative to the code requirements, with 79 per cent still planning or considering a gap analysis.

WTW pensions governance lead, Jenny Gibbons, commented: “It’s clear that pension schemes are concerned about the time and resource that could be involved in meeting the requirements of the code.

“However, of the schemes that have undertaken a gap analysis so far, we are seeing that many have realised that their current governance framework is closer to the level required by the code than they first thought.

“There is more flexibility in the new code’s requirements than many think, but at the moment it’s a fear of the unknown that seems to be driving anxiety around it.

“That’s why we would urge all schemes to identify their governance strengths and weaknesses sooner rather than later, so they know the length of their ‘to-do’ list and can plan in good time before the new code comes into effect.”

WTW’s survey also found that trustee board chairs spend an average of 53 hours per year on governance related activity, while chairs of sub-committees spend an average of 47 hours and regular trustees spend 37 hours.

The expanding role of the trustee is also making it harder to fill vacant trustee roles as 62 per cent of those surveyed say it is becoming harder to find members to act as trustees.

To address this, and to tackle the lack of diversity on trustee boards, nearly half (42 per cent) of schemes have taken at least one action in the last year to encourage diversity on their board.

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