Increased regulatory focus on DC arrangements has meant that trustees need to take greater interest in this area than ever before. However, we recognise that this needs to be done in a proportionate way that is tailored to the scheme in question.
To help you comply with the legislation and implementation of the regulations, we developed our GovernanceFit tool. Over 150 schemes have assessed themselves using this approach. In essence, the software allows a systematic assessment of scheme practice against the Pensions Regulator’s Code of Practice No 13 – the administration and governance of trust-based money purchase schemes – and reports on the level of compliance. The result is the creation of a focused and tailored action plan that can be implemented, together with a useful documented summary of scheme practice. We are also able to benchmark governance practice across the schemes in our database.
The GovernanceFit tool covers the following areas:
- Trustee board
- Scheme management skills
- Investment governance
- Value for members
- Communicating and reporting
The service consists of four main elements:
Identifies the extent of compliance with the Code of Practice and wider regulatory expectations. Importantly, any work undertaken to fulfil the Regulator’s DC quality features under the earlier version of the Code can be used and updated in the new assessment. The assessment has three levels in each of the six areas described above: legislative compliance, meeting the Regulator’s additional expectations and, finally, any scheme-specific activities that go beyond the prescribed requirements.
If any gaps are identified, either against the statutory provisions or against the individual scheme’s trustee objectives, then a plan can be put in place to address these.
A reporting and monitoring framework will be put in place so that, going forwards, objectives can be prioritised and tracked.
Specific actions for the Chair’s Statement will be identified, so that in future years this can be produced efficiently and with the right level of supporting evidence.
|Defined Contribution Scheme Governance