The Pensions Regulator

Latest Trustee toolkit module tackles fund management issues

Ref: PN07-03
30 January 2007

• Fund Management module released
• Applicable for trustees of both defined benefit and defined contribution schemes
• Also looks at elements of the statement of investment principles

The Fund Management module has been released by the Pensions Regulator as part of its free online e-learning programme for trustees at www.trusteetoolkit.com

Aimed at trustees of both DB and DC schemes, it focuses on the relationship trustees have with their fund manager and what they should expect from them and from investment consultants.

In the module, trustees learn how to: review and measure a fund manager's performance; select a fund manager; consider the various types of fund management – whether to opt for active or passive and value or growth; areas of corporate governance including shareholder activism and ethical investment; and review investment mandates.

Regulated community learning manager Terry Clayworth said: “Working through the module will give trustees knowledge and understanding of the role of their fund manager in making day-to-day investment decisions and of their own responsibilities for monitoring performance.”

The Fund Management module also looks at elements of the statement of investment principles and leads in to the next toolkit which deals with strategic asset allocation.

Editor's notes

1. The Pensions Act 2004 (sections 247-249) requires trustees to have knowledge and understanding of the law relating to pensions and trusts, and the principles relating to the funding of occupational schemes and the investment of scheme assets. They must also be conversant with their own scheme's policy documents.
2. The code of practice on trustee knowledge and understanding helps trustees to comply with the requirements and can be found, along with additional guidance for trustees, on the regulator's website at www.thepensionsregulator.gov.uk
3. The Trustee toolkit syllabus has been based on 'Scope guidance' available on the regulator's website, and also forms the basis of a new voluntary qualification for trustees launched by the Pensions Management Institute. This new voluntary qualification will replace the current Trustee Certificate offered by the Pensions Management Institute.
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 Pensions Regulator's powers include the ability to:
   • collect 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;
   • prohibit trustees who are judged not fit and proper to carry out their duties; and
   • issue a contribution notice or financial support direction.

   The Pensions Act 2004 also imposes a statutory obligation on 'whistleblowers' to report to us suspected breaches of the legislation.