Sole trustees have embraced The Pension Regulator's General Code, using it to innovate their in-house governance approaches and ensure they can be held to the highest account for governance, according to a survey by Hymans Robertson.

The research found that seven of the nine professional trustee firms surveyed said the General Code had 'to some extent' helped raise the bar on governance for sole trustee schemes.

The General Code came into force in March 2024 after nearly five years in development, emphasising the importance of proportionality in governance practices, allowing schemes to tailor their governance efforts based on their specific circumstances, size, and complexity.

The survey showed that the professional trustee firms that had adjusted to the General Code had done so through various approaches, including introducing centralised governance policies, leveraging technology to facilitate the process, and gathering MI.

Centralisation and technology have helped individual trustees to establish effective governance for their schemes, assisted with compliance, and created efficiencies when updating governance frameworks for new regulations.

The research also found that sole trustees were developing 'innovative and pragmatic solutions' to implement the risk management function (RMF).

Hymans Robertson said the degree of separation they could create, in terms of day-to-day risk management from risk oversight, will depend on the scheme's size and complexity.

It added that the approach to risk management was not generally prescribed at the firm level, giving sole trustees flexibility to exercise their discretion.

"Following the recent announcement from TPR, we've seen professional trustee firms acknowledge that achieving the outcomes members deserve demands high standards of governance and risk management, suggested Hymans Robertson head of sole trustee services, Shani McKenzie.

"There is an expectation that professional trustees will spearhead this," she continued.

"Further, in a landscape where decisions are becoming increasingly complex, professional trustees can play a vital role in ensuring pension schemes have good governance.

"We've seen from our research that many sole trustees have welcomed the General Code as an opportunity to enhance their in-house governance approaches and are taking diverse approaches to meeting their regulatory requirements.

"For the majority, this has been about leveraging technology and having standardised frameworks to ease the implementation and maintenance of an effective system of governance. Importantly, this is balanced with scheme-level freedom to exercise discretionary departures from the centralised approach," McKenzie explained.

She argued that flexibility at the scheme level was a "critical step" to achieving an effective system of governance and supporting the achievement of pension scheme goals and objectives.

"The terminology around the RMF requirements is new, as is the desire for a degree of separation between the trustee board and daily management of the framework," McKenzie added.

"There is room for interpretation here, and firms are taking innovative and pragmatic approaches to achieving this."

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