The Pensions Regulator

Member-nominated trustees and Internal controls codes come into effect

Ref: PN06-38
22 November 2006

The Member-nominated trustees and Internal controls codes of practice from the Pensions Regulator are now in effect.

The ‘Member-nominated trustees and directors – putting in place and implementing arrangements’ code requires that at least one third of trustees are member-nominated; or at least one third of directors of the trustee company be member-nominated. The arrangements must include a nomination process, a selection process and satisfy other statutory requirements.

The internal controls code gives guidelines to trustees and managers of occupational pension schemes on how to meet legislative requirements, as well as outlining the regulator’s expectations in relation to the assessment of risk, implementation and review of adequate controls.

Both codes of practice can be found on the regulator’s website: www.thepensionsregulator.gov.uk/codesofpractice

Editor's notes

1. The two codes of practice came into effect on 22 November 2006.
2. For further information on the regulator’s codes of practice visit: www.thepensionsregulator.gov.uk/
   codesofpractice
3. Codes of practice are not statements of law. However, they do have evidential value, meaning that they will be taken into account by the Determinations panel, a court or tribunal where relevant.
4. The Pensions Regulator is the regulator of work-based pensions in the UK, with wide-ranging and flexible powers under the Pensions Act 2004.
5. The powers of the Pensions Regulator include the ability to:
6. • collect more detailed scheme information;
   • 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.
7. The Pensions Act 2004 also imposes a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator.