The DC consultation process conducted by the Pensions Authority in late 2013 set out the Authority’s views on the future of DC provision and sought responses to specific questions raised. In relation to pension scheme governance the Authority indicated that it would publish a code of governance that would provide trustees with a central reference point for the key areas of a DC scheme.
Submissions to the consultation indicated a high level of support for such a code of governance to be issued by the Authority, as this would greatly assist trustees in clarifying the standards and competence it expects for effective trusteeship. The Society’s response to the initial consultation can be found here.
In response to these submissions, the Authority developed codes of governance for DC schemes which set out the standards trustees will be expected to adopt to demonstrate their commitment to serving the best interests of members and beneficiaries.
The text of the proposed code along with details of the consultation process can be found here.
The questions that formed part of the consultation are set out below:
- Are there any issues not covered in the codes at this point which you think should be?
- Does the level of guidance included in the codes provide sufficient details to assist trustees in the effective governance of their schemes?
- Do the codes contain enough practical guidance on the standards and competence that the Authority expects from DC trustees?
- Have you suggestions on how we could improve the codes?
While the Society welcomes the introduction of these codes, the Society’s response notes that adherence to them without significant levels of support is likely to be possible only by trustees of those schemes with sufficient resources of experience and finance.
The Society also suggests that separated codes be developed to cover:
• Contribution and benefit adequacy,
• Managing the benefit decision,
• Managing deferred members including:
o Maintaining contact,
o Whether different expense charges should apply,
o Options for transferring out.
Full details of the Society’s response is available here