How good is your scheme governance?
We have created an assessment questionnaire to help you measure how good your pension scheme governance is.
We have identified 11 key areas that you should have in place to maximise the efficiency of your scheme. The assessment asks you a series of questions about the governance of your pension scheme to identify any areas of risk you may have. It asks questions around how old your policies are for example, or if, in fact you have them.
Why is this important? Let’s look at each area in turn:
|Trustee business plan||Having a plan and vision – and importantly it needs to tie in to the company’s strategy to ensure aligned thinking.|
|Scheme Risk register||This identifies key risks, identifying the ones you can control vs the ones you can’t – to ensure you have risk management strategies in place for them. Examples include – Conflicts, pension funding, sponsor going bankrupt, cyber risk – e.g. loss of data.|
|Conflicts of interest policy||This should be current and reflect the existing board’s conflicts. It should be updated each time there is a change to the board. And if there are no
changes, it should be reviewed at least annually.
|Gifts and hospitality policy||This is to protect you against bribery. It demonstrates that you are whiter than white. You don’t want to be seen to be favouring one supplier over
another for example
|Trustee training log individual||This covers individual training – nothing stands still, the Pensions Regulator is constantly changing legislation so it’s vital to have continued professional development|
|Trustee training log||As above, but covers Board training. It’s important the entire board are on the same page and having the right training at the right time.|
|Trustee board||Diversity of thought and skills and types of people and size – vital. There are a number of different roles that need to be filled.|
|Timetable of advisers review||This is to ensure you are getting the best service from your advisers and best value for money. If you’re not, you aren’t able to make the best decisions which has a cost.|
|Review of employer covenant||This is the promise and the ability of the employer to pay through the pension scheme i.e. Your legal obligation and financial ability to support the scheme, now and in the future. It is critical – and should be part of your integrated risk management processes.|
|Scheme investment strategy last discussed with employer||Need to ensure this ties in with the company strategy and linked to the employer covenant. Can’t take more investment risk than the covenant can stand.|
|Assessment of Trustee board performance||This is a rear view assessment – reviewing historical decisions and actions to ensure the right decisions have been made. Such as, did we do the right things at the right time, or do we need training?|