Pensions - Articles - JLT comments on TPR's new DC code of practice

 “The new DC Code released today by the Pensions Regulator is simpler and shorter than its predecessor, which had been criticised for being too long and overly prescriptive. The new Code is better aligned to constituent elements of good DC practice addressing different aspects of governance. The ‘how to’ guides, in particular, are evidence of an effective consultation with the industry.

 “The new Code also takes into account the introduction of the pension flexibilities and governance requirements introduced from 6 April 2015. The broader aim is to continue to raise the overall standard of DC governance and administration.

 “The Code does assume that those reading it have a good knowledge of the legislation which applies to their scheme, as it does not set out in detail these requirements. Trustee training of the legislative requirements should be undertaken where appropriate and where the Code is not prescriptive, trustee boards will need to make judgement calls as to what is a ‘reasonable and proportionate’ method of ensuring compliance for their scheme.

 “Trustees should assess their scheme against the Code on an ongoing basis and use the assessment as an opportunity to review systems, monitor risks and prioritise actions. Overall this is a positive development which places the focus on the outcomes rather than the process, which has to be a good thing.”