A quarter of defined benefit (DB) pension schemes have not yet started on the work needed to meet The Pensions Regulator’s (TPR) new General Code, polling from WTW has revealed.

The General Code, which is set to come into force from 27 March, brings together and updates 10 existing codes of practice into one set of expectations on scheme governance and administration.

Given the March implementation date, WTW emphasised that there is an immediate requirement to undertake a gap analysis to identify shortcomings and to create a plan of action to address them.

Failure to do so, the firm warned, would lead to a pension scheme falling short of the regulator’s expectations, and at risk of regulatory intervention.

In line with this, WTW found that the majority of schemes have taken steps to prepare, as three quarters of DB pension schemes have completed a gap analysis of the General Code requirements and started work to construct a plan of action to remedy their shortcomings.t

In particular, 41 per cent of schemes said they had turned their attention first to completing policy and process documents, while 12 per cent said risk management was the first place to shine a spotlight.

The majority of the remainder intended to make progress in all areas or weren’t sure where to start, with just a handful turning first to aspects of board effectiveness and diversity.

Commenting on the findings, WTW head of pensions governance, Jenny Gibbons, stated: “For those who haven’t started yet, the publication of the Code represents the firing of the starting gun.

"But the race before us is a marathon not a sprint, with runners making steady progress much more likely to achieve their goals. The General Code is ultimately about improving governance and risk management for the benefit of members.

“It’s very promising that most schemes know where their key focus for the code requirements will be now.

“It’s important to look at the direction in which the scheme is heading too. For example, if a scheme has already taken risk out of its funding and investment strategy, then the board may want to focus on those parts of the code that spell out a cyber risk management and preparedness approach.

“Similarly, if there is likely to be an upcoming change in the trustee board’s personnel, then the scheme may want to focus on board effectiveness or trustee recruitment policy. Each pension scheme’s situation and requirements will be different and these are the areas that a thorough gap analysis should identify.”

---