The Pensions Regulator

Schemes clear on the importance of good governance – standards remain consistent

Ref: PN08-14
17 July 2008

As part of its commitment to improving the way pension schemes are governed, the Pensions Regulator has today published the results of its third governance survey – designed to assess standards of scheme governance in the UK.

Overall ratings are reasonably consistent for 2007 and 2008, following some marked improvements between 2006 and 2007. Schemes are clear about the aspects that contribute to the raising of governance standards – particularly the importance of regular trustee board meetings, trustee training and the level of trustee experience.

There are also generally consistent positive ratings for boards' abilities to meet their overall governance activities. However, it remains the case that differences in experience and practice between small and large schemes can be clearly seen across these activities.

Some key findings from the schemes surveyed were that:

• use of the Trustee toolkit in schemes is up by 5% on last year;
• retention of trustees is not a problem for 91%;
• recruiting trustees is not a problem for 84%;
• 92% are aware of the regulator's codes of practice; and
• 89% believe the standard of administration from their service provider is good or very good.

However, there are areas where improvements must still be made. These include: better documentation of internal controls and maintenance of registers of trustees' interests; and in smaller schemes improved trustee understanding of scheme rules, and compliance with administration service standards.

The Pensions Regulator will continue to offer support and guidance to those running pension schemes to ensure they are aware of the requirements and best practice, in line with its educate, enable and enforce approach. We will shortly be publishing final guidance on how trustees should manage conflicts of interest, and will be consulting with the pensions industry on forthcoming record keeping guidance, with the aim of working with those involved in running pensions to improve standards in this area.

To view the 2008 Governance Survey in full visit the Pensions Regulator's website.

The regulator has also today published its annual report and accounts for 2007/ 2008, also available on the website.

Editor's notes

1. The Pensions Regulator's Governance Survey is an annual exercise conducted amongst pension scheme trustees, designed to monitor the standards of scheme governance of occupational pension schemes in the UK. The survey also serves to highlight areas for specific attention, informing the regulator's understanding of trustees' work and the best approaches for their education and guidance, and raising their profile of these issues among the wider industry.
2. This is the third year that the governance survey has been carried out. Telephone interviews were conducted on behalf of the regulator by Ipsos MORI between 10 December 2007 and 11 February 2008. A more detailed technical manual booklet is available in addition to the 2008 Governance Survey and provides more comprehensive detail on the methodology of the survey including sample design and weighting.
3. The Pensions Regulator is the regulator of work-based pension schemes in the UK, with objectives to protect members' benefits, promote good administration and reduce the risk of calls on the Pension Protection Fund. Our approach is risk-based focusing on education and enablement, with enforcement where appropriate. We have the ability to:
4. • collect information about pension schemes; through scheme returns, under the scheme funding regime and as well as statutory (including whistleblowing) reports;
   • issue notices requiring actions to tackle non-compliance, prohibit trustees who are judged not fit and proper to carry out their duties or appoint independent trustees;
   • direct pension schemes as to how to calculate their liabilities and the contributions required;
   • issue a contribution notice where there is a deliberate attempt to avoid liabilities, or a financial support direction where the employer is a service company or insufficiently resourced.