Trustee Knowledge and Understanding (TKU)
Trustee Knowledge and Understanding (TKU)

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Trustee Knowledge and Understanding (TKU)
  • The TKU framework
  • Which trustees are subject to the TKU duty?
  • Scope of the TKU duty
  • The Pensions Regulator's expectations
  • Acquiring TKU—period of grace for new trustees
  • Maintaining TKU
  • Demonstrating and reporting on TKU
  • Failure to comply with the TKU duty
  • The TKU duty for pension board members of public service pension schemes

FORTHCOMING DEVELOPMENT: On 2 July 2019 the Pensions Regulator (TPR) outlined consultation proposals into the future of trusteeship and governance. TPR proposes to reduce the number of poorly governed pension schemes by reforming its regulatory standards on trusteeship and governance and, specifically, to reform its approach to Trustee Knowledge and Understanding (TKU), promote increased diversity on trustee boards and remove barriers to DC consolidation. Among other things, rather than setting a broad TKU syllabus, TPR proposes setting competency-based standards which reflect the standards arrived at in its earlier 21st century trusteeship campaign. These standards are set out in Annex 1 of the consultation paper. TPR also wants to hear views on whether there should be a legislative requirement to demonstrate a minimum level of TKU (eg through relevant training or qualification). TPR proposes to set higher expectations on levels of TKU held by professional trustees and is seeking views on whether it should focus more on establishing and setting standards and ensuring all trustees are aware of them (through more direct communications), while relying more on industry to have the main role in educating trustees. For more information, see News: ‘Consultation launched to assess effectiveness of pension trustee model’ LNB News 02/07/2019 42 and News Analysis: TPR consults on future of trusteeship and governance.

Pension scheme trustees—including directors of corporate trustees and, since 1 April 2015, trustees of public service pension schemes—have a statutory duty to gain a certain level of knowledge and understanding (unless they benefit from an exemption set out in Which trustees are subject to the TKU duty? below). This