Broadstone supports the consultation’s objective of ensuring pension scheme trusteeship, administration and governance adapt fast enough to meet the challenges of a modern pension system.
In the Defined Contribution (DC) market, this is critical as consolidation accelerates to create a landscape built around a small number of large-scale ‘megafunds’. To deliver consistently for members, trustee boards must adopt clearer risk appetite statements, FTSE-style committee structures, independent oversight of illiquids and decumulation pathways and vastly enhanced operational-resilience and cyber-governance disciplines.
As structural conflicts of interest become more significant as the market consolidates, schemes may benefit from greater structural safeguards where decision making concentration is higher. Broadstone supports measures such as independent procurement for material mandates, comply-or-explain rotation/retender cycles for key advisers and documented multi-party review for material Professional Corporate Sole Trustee decisions (for example, default investment or administrator selection).
A consolidated sector also requires regulators to act earlier and more decisively where governance weaknesses could affect large numbers of savers. Enhanced powers to direct professional trustee appointments, require independent audits and secure more timely reporting will support better, safer outcomes.
On other areas covered by the consultation, Broadstone:
supports mandatory minimum standards for administrators and ISPs, registration with TPR, strengthened oversight powers, and orderly exit frameworks to ensure member protection;
believes policy should support both dominant end-game paths for Defined Benefit (DB) schemes, and include mandatory pre-buyout data audits, clear responsibility allocation between trustees, administrators and insurers, and robust evidence packs are essential to ensure members receive the right benefits at the right time;
supports the continued professionalisation of trusteeship and professional trustees should meet statutory accreditation, competence, CPD, capacity and independence standards.
David Brooks, Head of Policy at Broadstone, commented: “Overall, we advocate a regulatory and governance framework that reflects the scale, complexity and interconnectedness of the future pensions system.
“This will require institution-grade governance for DC megafunds, stronger readiness for DB transactions, and system-wide improvements in conflict management, data assurance and administrator oversight.
“It is encouraging that DWP is proactively pursuing measures that could drive a step change in the standards across the pensions industry. Ultimately, this is critical to developing a system that will deliver the best possible outcomes and experience for savers helping to build trust.”
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