How can the Pensions Regulator help trustees more?
This is the subject of research into the trustee landscape commissioned by the Pensions Regulator to help it understand in which areas trustees need to develop their skills and knowledge further. The researchers conducted 816 telephone interviews with the trustees of defined benefit (DB), defined contribution (DC) and hybrid schemes. The headline results are:
- Trustee boards generally believed that their knowledge and skills were good but some deficiencies were revealed, particularly around the understanding of pension scheme investments, pensions law and the roles and responsibilities of trustees
- Half of schemes with non-professional trustees did not believe that all their trustees had a level of trustee knowledge and understanding that met the required standard
- Trustees almost universally believed that they have sufficient training opportunities, although many do not undertake formal training or have a training plan in place
- Schemes used for automatic enrolment were generally better run
- Trustee boards of DC-only schemes were least likely to display good governance and in schemes with both DB and DC elements trustees spent five times as long on DB issues compared to DC issues; and
- Strikingly, 9% of schemes reported that they could rarely or never afford to appoint external advisors (these were much more likely to be small schemes)
The Regulator states that next year it will set out what it believes an effective 21st Century trustee looks like and what it will do to further support trustees.
Comment
This would have been merely “interesting” except that the work will no doubt inform the Regulator’s new “21st Century trustee” model, promised for next year, which we hope will not be overly prescriptive.
Increasing numbers of pensioners show the need for state pension changes
Figures from the latest Office for National Statistics (ONS) population projections show why state pension change was needed, with the UK population estimated to increase from 64.6 million in mid-2014 to nearly 75 million in 2039. By 2047 the UK is estimated to have the highest population in the European Union.
In 2014 there were about 310 people of pensionable age for every 1,000 people of working age. That figure drops to 284 in 2020 before increasing to 370 in 2039. As UK state pensions are funded by the workers of that time, less than three workers will be paying for each pensioner’s state pensions.
The research is based on the population at 30 June 2014 and the increases in State Pension Age (SPA) currently in legislation – if SPA increases further the proportion of pensioners may decrease.
This Pensions Bulletin does not constitute advice, nor should it be taken as an authoritative statement of the law. For further help, please contact David Everett at our London office or the partner who normally advises you.
