The Pensions Regulator

Governance survey reveals increase in trustee training

Ref: PN07-11
12 July 2007

Findings from the Pensions Regulator's second occupational pension scheme governance survey have been published today (Thursday) as part of its ongoing commitment to improving the way pension schemes are governed.

Key findings from the survey were that:

• there has been an increase in trustee training;
• high levels of trustee training continue to be associated with strong governance;
• schemes are not experiencing significant difficulties in recruiting or retaining trustees;
• scheme confidence in managing conflicts of interest has increased significantly, and most schemes consider they manage conflicts effectively;
• the majority of defined benefit schemes have investigated the financial standing of the employer in the past year; and
• larger schemes are monitoring scheme administration more closely than smaller schemes.

However, there were areas where there has been little improvement, such as in risk management and internal controls, and managing scheme administration.

Chief executive Tony Hobman said: “We take comfort from the evidence of improvement in three of the areas of governance on which we have focussed most heavily during the last year; trustee knowledge and understanding, management of conflicts of interest and monitoring the employer covenant. However, we recognise that there is still scope for more improvement in these and other priority areas.

"We expect trustees to compare their own performance against the key risks in the survey and continue to work towards addressing any gaps. We encourage trustees to review the guidance already published, and the good practice initiatives and guidance that we will be publishing over the forthcoming year.”

Editor's notes

1. To view the governance survey visit the online publications section on our website.
2. The governance survey is published annually. The 2007 survey was carried out on behalf of the regulator by RS Consulting, and by Critical Research. Representatives from approximately 1300 schemes provided information in short interviews. Chairmen, lay trustees and pension managers from 500 of these schemes took part in a full interview.
3. The Pensions Regulator is the regulator of work-based pensions in the UK, with wide-ranging and flexible powers under the Pensions Act 2004. Its 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 prior to wind-up;
   • 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.