Requirements for trustees

Being a pension scheme trustee means you need to keep your members and The Pensions Regulator (TPR) informed.

What things should I be telling my members?

There are requirements for trustees of ‘relevant’ schemes on governance standards, charge controls and communication about pension flexibilities. If the rules apply to your scheme, you have to:

  • Appoint a chairperson if your scheme does not have one.
  • Produce a chair’s statement and publish it in the scheme’s annual report and accounts, so it’s available to all members.
  • Include in the statement an explanation of how you’ve ensured your scheme meets the governance standards.
  • Highlight in the statement any areas where standards fall short and what actions you’re taking to remedy this.
  • In your scheme return to The Pensions Regulator (TPR), declare that you’ve produced a chair’s statement.
  • Continue to meet the standards set out in TPR’s Defined Contribution (DC) code of practice.

Trustees of ‘relevant’ schemes also need to include information in their chair’s statement regarding transaction costs and administration charges applied to their scheme. You need to tell members how this information can be accessed, and it should be made available on a publicly accessible website, along with a Value for Money statement.

In 2019 rules were introduced to improve transparency around scheme stewardship, financially material considerations (including environmental, social and governance (ESG) and climate change) and relationships with asset managers. Trustees need to include certain information about this in their annual report, produce a statement of investment principles and an implementation statement. The information also needs to be made available to scheme members. Not all of the 2019 changes apply to all schemes – this will depend on the type of scheme, and number of members, you have.

The government has produced a factsheet that explains the changes and the schemes they affect:

Download government Shareholder Rights Directive II Factsheet

Are there any other requirements that affect my scheme?

Trustees of ‘relevant’ schemes that are three years or older with total assets of less than £100 million, are required to complete a Value for Member Assessment. This will apply for scheme years ending after 31 December 2021 and yearly thereafter.

As part of your assessment, you must consider costs and charges, net investment returns, scheme governance and administration, and make a comparison against three other schemes. The assessment outcome must be reported in your chair’s statement and your scheme return, and be published on a publicly accessible website.

Where a scheme doesn’t offer value for members, trustees need to identify what steps can be taken to improve conditions, or consider whether members would benefit from the scheme being wound up and transferring to a different arrangement.

What happens if I don’t meet the requirements?

It’s important to understand that, as a trustee, it’s your responsibility to make sure any requirements that apply to your scheme are implemented properly and on time. TPR can impose fines on trustees who don’t comply and can also take intervention action against schemes. You should also make sure you can support any claims in your statements as TPR can request evidence.

You can find more information on The Pensions Regulator website.

What can ReAssure do to help me?

You can contact us to request:

  • Information on transaction costs for your scheme.
  • Information on administration charges, including net investment returns for your scheme year.
  • An illustration showing the impact of the transaction costs and administration charges for a typical member’s pot.

You can also read our Trustee Assurance report to learn how we support you with the governance and administration of your scheme.

Our Service Level Agreement (SLA) metrics for the previous year are here.

Information on our approach to sustainability, stewardship and our relationships with asset managers can be found here.

Additional information on former Legal & General Occupational Schemes

Legal & General Investment Management produce several assurance reports on internal controls (AAF 01/06) which can be used by trustees of former Legal & General Occupational Schemes. The reports describe the control environment and control objectives with regard to the management and administration of pooled investment funds, and sets out the control procedures established to meet those objectives. The current reports are available below.

LGIM Pooled and Segregated Funds Report 2021

LGIM Property Report 2021

RA AAF Internal Controls Report 2020

SOC 1 LGIM America Investment Advisor Operations Report 2020

AAF Bridging Letter to 6 April 2022