Pension trustees have a range of duties that they are legally obliged to perform on behalf of the members of older-style, trust-based pension schemes.
With the decline of trust-based defined benefit (final salary) and defined contribution pension schemes, the governance and stewardship afforded by these trustee duties has not been carried over to contract-based pension schemes such as group personal pension plans.
Now, the Pensions Regulator (tPR) has established a best practice governance framework based on 6 key principles to ensure modern pensions also receive regular stewardship and create 'good member outcomes'. This framework seeks to ensure:
- clear roles and responsibilities are defined
- effective decision making
- appropriate investment options
- appropriate default investment strategy
- effective performance assessment
- clear and relevant communications
Establishing a governance committee for your corporate pension plan should ensure it remains effective, relevant and good value.