It is the first time TPR has used a survey to measure trustee governance practices across the market. The new data establishes a baseline as reforms reshape the pensions market and raise the demands of trustee boards.
TPR is calling on trustees to act now to make sure they have the governance, skills and capability needed to make increasingly complex decisions in the interests of members including making active decisions about the future strategic direction of their scheme. This includes consolidation in the interests of members.
The research, conducted independently, with hundreds of trustees across both defined benefit and defined contribution schemes found:
Trustee training is widely established across the market, with mandatory training reported by 90% of DB schemes and 77% of DC schemes.
Larger schemes and those with professional expertise were more likely to achieve higher governance scores.
Seven in 10 have compared their governance against TPR's General Code. The Code sets the standards which all trustee boards should follow.
Trustee boards face conflicting decisions on focus with only 29% of trustee boards saying improving member outcomes was the primary driver of trustee decision-making. While 55% said member outcomes influenced decisions, but they balanced it with other priorities such as regulatory compliance and cost which were equally important.
And fewer than half of DB and DC schemes, excluding micro schemes, reported having a trustee succession plan, highlighting a gap in planning for future trustee appointments.
TPR says the findings present new expectations for trustees to benchmark their governance against its General Code, strengthen succession planning and board development, and ensure governance and risk management arrangements are supporting good outcomes for members.
TPR's Executive Director of Strategy, Policy and Analysis, Richard Knox, said: "The decisions facing trustees are becoming more complex and consequential. That is why the bar on governance standards is rising. Every trustee board should be asking themselves whether they have the skills and experience needed to make good decisions now and in the future.
"We expect all trustees to review their governance against the General Code and keep member outcomes at the centre of their decisions."
TPR will use the survey as a baseline to track how governance develops as the market and regulatory framework change. As part of this, the regulator will be focussing its work on supporting trustees and boards in assessing their skills and competencies as well as developing its understanding of how schemes are using Effective Systems of Governance (ESOG) and Own Risk Assessments (ORA) to drive improvements in their governance.
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