The Pensions Regulator

Results of OPS Regulatory Survey published

Ref: PN05-29
30 September 2005

Research published by the Pensions Regulator today shows a similar level of scheme trustees have taken steps to improve their knowledge and understanding since research conducted in 2003. The findings indicated a mixed picture of standards of governance and administration amongst occupational pension schemes.

In the Pensions Regulator's Occupational Pension Schemes (OPS) Regulatory Survey, only 3% of large schemes said that trustees were not provided with training, compared to 23% of medium sized schemes and 62% of small schemes.

The research found demand among all types of occupational schemes for the new e-learning programme being offered by the Pensions Regulator, with 68% of survey respondents saying scheme trustees would be likely to use free and user friendly interactive learning materials provided by the regulator. Such a service could help meet learning needs amongst many small to medium-sized schemes, who generally do not have enough resources. The service could also contribute to the training of trustees of large schemes.

In terms of more specialist learning activities, only half of large schemes had at least one trustee that had attended an investment training course in the past three years, even though 95% of large schemes had assets that were not solely invested in insurance policies.

For defined contribution schemes, respondents cited lack of confidence, member understanding and inadequate contributions as key risks to providing members with adequate retirement benefits. This is an area that could be addressed in part by those responsible for the governance of pension schemes through high standards of administration and effective member communications.

There are many activities underway or planned by the Pensions Regulator that will help trustees to understand what is expected from them and provide guidance. These include the regulator's codes of practice and guidance material on trustee knowledge and understanding and free e-learning material.

Editor's notes

1. To view an executive summary of the survey, visit www.thepensionsregulator.gov.uk.
2. The Occupational Pension Schemes (OPS) Regulatory Survey was a yearly survey carried out among live private sector occupational pension schemes with at least 12 members, under the Pensions Regulator's predecessor OPRA (Occupational Pensions Regulatory Authority). This is the final survey that will be conducted in this series, as it will be replaced by research that specifically focuses on scheme governance matters.
3. 424 eligible responses were received from a random sample of 444 schemes (96% response rate). The sample was stratified by nine groupings based on scheme benefit type and bands of scheme membership. This method was chosen to ensure adequate coverage of the three key types of occupational schemes and the range of scheme sizes in terms of total membership.
4. Respondents were asked to complete a postal questionnaire and provide a copy of the latest trustees' annual report and scheme accounts.
5. The Pensions Regulator has been established as the new regulator of work-based pensions in the UK, with wider and more flexible powers under the Pensions Act 2004. It has replaced Opra which no longer exists.
6. The new powers of the Pensions Regulator include the ability to: collect more detailed scheme information; impose a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator; issue improvement notices and third party notices, enabling the regulator to ensure problems are put right; freeze a scheme that is at risk, while the regulator investigates; and prohibit trustees who are judged not fit and proper to carry out their duties.