Pension scheme trustees have “no excuses” for not knowing what is expected of them following the publication of The Pensions Regulator’s (TPR) General Code, TPR director of regulatory policy, analysis and advice, Louise Davey, has said.

Conducting a session at the Pensions Age Spring Conference, Davey stated that the General Code of Practice sets out clear expectations on scheme governance, leaving no excuses for being unaware of what required of trustees.

“We are very mindful of the impact of change on trustees, and we absolutely believe that trustees are the backbone of the pension system,” she continued.

“But as consolidation increases across the market and we move towards fewer, larger schemes, the ask of trusteeship is changing.”

TPR needed trustees to be suitably skilled to invest in diversified assets that deliver good outcomes for savers, not because the regulator favours one asset class over another, but because all schemes should have the knowledge and experience to be able to consider investments in asset classes that can deliver these outcomes, Davey added.

She highlighted that the pensions landscape was shifting towards a marketplace of complex financial institutions, with trustees needing to factor in ever-more complex issues, whether that’s issues relating to climate change, social factors, or even the “increasingly knotty issue” of the move from accumulation to decumulation and the best way to pay pensioners.

“These are some of the relatively new and different considerations that trustees now have in front of them,” Davey said.

“The range of issues that trustees must grapple with, and the required knowledge, is hugely demanding, and there is concern that this may be beyond the ability of some trustee boards.

“Indeed, the research we have done over the past decade or more shows that, in some cases, that is true.

“All of this poses some questions, ones that need answers not just from TPR but also from the industry more widely.”

When asked about the increasing amount of regulation by a conference attendee, who argued that regulation could be simplified, Davey conceded that they were “probably right” and that “most people would say if they were starting now that this isn’t what you’d start with”.

“Obviously it is complex, and the disclaimer is that it’s the role of government to unwind regulation, not TPR, because we have the legislative framework that we are set,” she continued.

“But I think we can all recognise areas where regulation has been written for things which aren’t so relevant now or where it has been superseded.

“When new regulation is being introduced, we try to work very hard with the government to make sure there isn’t undue burden being placed on trustees or other parties."

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