The Pensions Regulator

In drawing up this regime for trustee knowledge, understanding and conversance, the Pensions Regulator intends that trustees should have sufficient knowledge and understanding to enable them to:

• increase their own confidence in their ability to carry out their roles
• know about their powers as well as their duties and responsibilities
• understand their own schemes, how they work and, in the case of defined benefit (DB) schemes, the importance of the employer covenant
• understand the advice they are given, enter into discussion with their advisers and participate fully in decision making
• be able to question or even challenge advice when the need arises
• recognise when they need to consult their own or other advisers for particular specialist advice or when they need to consider reselection
• recognise conflicts of interest and be able to deal with them and recognise the need for policies and procedures for dealing with them
• have a working knowledge of the most important parts of the documentation which sets out the rules governing their schemes and other scheme policies
• select a learning regime which is delivered with the precise needs of the individual trustee in mind and making full use of recent educational developments and/or specific training skills

This code is designed to help trustees by setting out:

• to whom the code applies and those schemes for whom the regulator does not think that this code is appropriate
• what is meant by knowledge and understanding in the legislation
• what is the scope of the knowledge and understanding requirements
• how trustees might approach the task of determining the elements of knowledge and understanding which are appropriate for them
• how trustees might acquire the knowledge and understanding they need and how they might feel confidence that they have done so
• how they might update their knowledge and understanding
• what is the scope of the requirement to be conversant with scheme documents (i.e. which are the documents in question)
• what is meant by being conversant with these documents using examples
• how trustees might become conversant with those documents and how they might feel confidence that they have done so
• how trustees might be sure that they remain conversant with scheme documents which may be amended from time to time

The regime has been designed specifically to enable trustees to meet requirements at no additional cost. Those schemes which purchase training already may continue to do so, if for a different purpose (e.g. further training rather than induction training) but the result may well be no further outlay.