Increasing regulatory expectations, market volatility, and evolving risks mean trustees need strong skills, supported by robust governance and risk management frameworks, to deliver the best outcomes for members. The Government has published a consultation paper on ‘Trust-based pension schemes: Trustees and governance, building a stronger future’, aimed at strengthening standards and keeping pace with a rapidly changing landscape. The consultation period closes on 6 March 2026.
The consultation explores the following key themes, building on the Government’s call for evidence in 2023 and its response to the Work and Pensions Select Committee’s DB Pensions Schemes inquiry.
The Government aims to raise standards for all trustees, considering strengthening requirements on technical knowledge and broader skills such as leadership, negotiation, investment management, communication, and financial planning. It is reviewing what works well, identifying barriers, and considering how to provide additional support to ensure robust governance, with 2030 being the key milestone for fundamental change under the Pension Schemes Bill.
These priorities align with The Pensions Regulator (TPR)’s new trusteeship strategy, introduced following the Pension Schemes Bill.
The Government recognises the value of lay trustees in representing member views and is exploring a ‘one stop’ website to signpost training resources. It is also seeking views on introducing additional standards, such as mandatory accreditation, and the associated impact and funding implications.
As the industry consolidates into fewer, larger DB and DC multi-employer schemes, the Government acknowledges the challenges for the traditional member-nominated trustee model. Nevertheless, it emphasises that member voices must remain central and seeks views on how to achieve this.
The Government recognises the governance benefits of professional trustee firms. It is reviewing whether additional safeguards are needed for certain sole trustee governance models and to mitigate potential conflicts where ancillary services are provided by professional trustee firms. The Government is also considering whether to impose limits on the number of appointments held by individual professional trustees to ensure that effective governance is not compromised, particularly where urgent action is needed in times of unforeseen market activity.
As anticipated, the Government is exploring introducing mandatory accreditation and higher standards for professional trustees, including enhanced knowledge and understanding requirements (beyond those for lay trustees).
With market consolidation increasing, the Government is considering measures to keep trustee boards focused on member outcomes. This includes improving trustee appointment and replacement processes and promoting greater diversity, talent, and skills to boards. It is also exploring alternatives to the current TPR process for removing and replacing trustees, such as appointing a public (independent) trustee.
The Government is exploring ways to collect data on trustee board composition for its proposed trustee directory, while minimising regulatory burden. Options under consideration include introducing a requirement for all trustees to register individually with TPR or expanding the information captured in the scheme return. It also indicates that a statutory definition of ‘professional trustee’ will be necessary to enable clearer distinctions. The Government rules out publishing the directory information.
The Government acknowledges the vital role of high-quality administrators in a consolidated pensions landscape and maintaining public trust in the pensions system. It is considering introducing mandatory administration standards for trustees to enforce, or alternatively, direct regulation of administrators. In addition, it is exploring whether Integrated Service Providers (ISPs), which most schemes currently use to connect to the pensions dashboard, should be included in any future regulatory framework for administrative services.
Recognising the concentration of third-party administrators, the Government asks what role TPR should take in reducing the risk and impact of a ‘disorderly market exit’ by a provider.
Addressing the shift towards larger ‘mega funds’ and ensuring governance frameworks keep pace with consolidation trends, the Government is seeking a deeper understanding of the relationship between trustees and those with the authority to appoint or remove them. In doing so, it is examining potential conflicts of interest that could compromise trustees’ independence or hinder their ability to provide effective challenge.
TPR has already invited trustees and other industry stakeholders to participate in two roundtables early in the New Year to explore the effectiveness of the current governance framework and consider whether changes are needed to ensure trustees have the skills to deliver the best member outcomes. These discussions will help shape its future regulatory approach and inform its response to this consultation.
