Scheme governance

The governance of trust-based occupational pension schemes is the responsibility of the trustees, although trustees usually appoint a scheme administrator to look after the day-to-day running of the scheme. Trustees need to be aware of their statutory duties in relation to scheme governance.

The key statutory governance requirements of trustees include:

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to establish and operate an effective system of governance including internal controls
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to report certain scheme information to the authorities, including the Pensions Regulator
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to appoint certain professional advisers to the scheme
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to manage conflicts of interest
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to keep scheme records
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to identify the scheme’s statutory employers
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to run the scheme in compliance with the scheme’s trust deed and rules (as well as legislation). This involves (i) correctly interpreting the trust deed and rules, and (ii) taking steps to ensure the correct benefits are paid to members and beneficiaries in accordance with the scheme's rules (ie ensure no overpayments are made)

The Pensions Regulator also expects trustees to improve the scheme’s equality, diversity and inclusion (EDI) in the belief that EDI results in better decision-making, improved value for money for savers

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