Mark Stopard, Head of Proposition Development at ZEDRA, said: “The introduction of a structured authorisation framework for multi-employer CDC schemes is a significant and welcome development. Well-governed multi-employer arrangements have the potential to materially improve member outcomes through scale and effective risk-sharing across a broader workforce. However, if the market is to develop with confidence, further clarification is needed around roles and responsibilities within multi-employer CDC structures. Trustees must be able to demonstrate meaningful oversight of the day-to-day running of the scheme and be satisfied that it is being managed to the required standard. The requirement for a governance map covering ‘all’ individuals involved in decision-making risks casting the net too widely. Without clearer parameters, a broad range of individuals across an organisation could fall within the authorisation and fit and proper regime, creating a material operational burden not just at the point of authorisation but as part of ongoing governance.
“Trustees cannot reasonably be expected to approve every document that may constitute marketing without becoming embedded in the operational activities of the scheme proprietor, which risks compromising their independence. The trustee role should instead focus on agreeing core messaging principles within a clear policy framework and seeking assurance that these are being followed in practice. Similarly, in meetings with employers or prospective employers, discussions will inevitably cover scheme design, return targets, investment strategy and oversight. In that context, drawing a clear distinction between legitimate governance dialogue and what could be interpreted as promotion may prove challenging.”
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