In the wake of the Pension Schemes Bill, the CEO of The Pensions Regulator (TPR), Nausicaa Delfas, explores the qualities of a ‘good trustee’ in the evolving, and increasingly demanding, pension landscape.
On 5 June 2025, in a speech entitled ’The changing nature of trusteeship’, TPR identified five key trustee traits that it believes are ‘central to good trusteeship’. In doing so, it emphasised its expectations under the General Code of Practice and referenced lessons from financial services regimes and corporate governance standards. It also highlighted the value from its ongoing engagement with administrators and professional trustees, alongside its shift of approach to a more prudential style of regulation.
TPR will be working with the government on a consultation on trusteeship and governance, expected later this year.
Saver outcome focused: TPR expects strong risk management controls and high standards of stewardship as part of good governance, ensuring informed decision-making in the best financial interests of members. To support this focus, at least in relation to defined contribution scheme defaults, TPR expects trustees to establish clearly defined objectives for members, regularly reviewing these by comparing real-world performance with forecasted models and adjusting strategies accordingly.
Able to challenge constructively: TPR emphasises the importance of diversity of thought on trustee boards and recognises the potential barriers to effective decision-making for both professional trustees and member-nominated trustees. It proposes working with industry to develop an assurance framework to ensure reviews of trustee board effectiveness every two to three years.
Highly skilled and diligent: TPR is seeking to develop higher standards of accreditation for trustees. The Government has already announced in its response to the House of Commons Work and Pensions Committee that, as part of the upcoming consultation, it will consider whether the current voluntary accreditation arrangements are sufficiently robust for professional trustees and how it can provide further support for lay trustees. A new trustee register will also enable TPR to identify which schemes have accredited trustees and how many trustees have completed its toolkit.
Through engagement with schemes, TPR aims to ensure that schemes are meeting “the basics as set out in our general code” and that their “broader governance is appropriate for their circumstances.”
Collaborative but accountable: Trustees retain ultimate responsibility for their scheme and TPR wants to see examples of trustees challenging their advisers, even if they feel that they do not have specific expertise in that area. TPR recognises administrators as a ‘critical partner’ of trustees and will build on its current engagement with them, focusing on key issues such as risk management and cyber resilience. In the meantime, it plans to publish a report on its findings to date in August.
Data-led: TPR will scrutinise schemes’ operational resilience plans through its data quality regulatory initiative and work with schemes and the industry to drive the development and adoption of open data standards through the implementation of its Digital, Data and Technology (DDaT) and Data strategies. It also references the value that AI has brought to its own operations.
At the same time as raising standards, TPR is also actively looking at how it can reduce any unnecessary regulatory load and aims to conduct a broad review of its scheme return and supervisory returns.
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On 3 June, the Pensions Regulator (TPR) published guidance for both trustees and employers on the various options facing mature pension schemes with Defined Benefits (DBs).
The covering blog – "Helping trustees and employers understand their options in defined benefit pensions" highlights the transformation in scheme funding over TPR’s 20-year lifespan, citing its analysis that 49% of schemes are in surplus on a buy-out basis.
The blog links not only to the guidance, which we summarise below, but also discusses a recent real-life case where TPR’s Determination Panel agreed to issue an order authorising the trustees to modify the scheme rules to permit payment of surplus to the employer on wind up – where the rules contained no such provision. The specific facts of the case are important but, together with certain Pensions Ombudsman cases, point to a key criterion for considering the distribution and/or sharing of surplus – how the surplus is considered to have arisen.
Although referred to as Endgame guidance, it extends further by addressing various issues related to running on a scheme, even when funded to or beyond buy-out solvency. Perhaps unsurprisingly, it also covers considerations regarding surplus. Much of this emphasises the need to obtain appropriate advice and highlights the expectation that the imminent Pension Schemes Bill will contain measures to facilitate payment of surplus.
Even for schemes that are not in surplus, the guidance sets out aspects that trustees and employers might want to consider where the intention is that their scheme should run on – at least in the medium term.
The guidance also covers governance elements, such as the pros/cons of Fiduciary Management and/or appointing one or more (accredited) professional or sole trustees.
For schemes where there is no intention to run on, the guidance highlights various options, along with their pros/cons. These options range from transferring to a Superfund or DB Master Trust to various insurance options – longevity swaps, buy-ins and, of course, buy-out. The guidance is also peppered with links to other relevant TPR guidance covering many of these topics.
Many of the options outlined by TPR are then ‘brought to life’ through case studies.
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