TISA supports DWP review of trust-based pensions scheme governance as trustee board demands accelerate
The Investing and Saving Alliance has today voiced its support for DWP to review whether current trustee arrangements remain fit for purpose or if changes are required to match the rapidly expanding range of responsibilities trustee boards are now expected to oversee.
Responding to a DWP consultation on the governance of trust-based pensions schemes, TISA highlighted the importance of trustee boards diversifying their expertise to govern a rapidly expanding agenda, including technology, AI and behavioural science, as well as major upcoming reforms across the pensions landscape such as Value for Money.
TISA also recommends that boards use sub-committees to preserve member representation and offset the impact of trusts consolidating into single Trustee boards responsible for potentially thousands of employers.
Renny Biggins, Head of Policy: Products & Long-Term Savings at TISA, said:
“With AI, technology and behavioural sciences playing an increasing role in the trust-based pensions schemes, trustee boards are being asked to govern far more than they were designed for a decade ago. It is essential that governance structures and board capability match these changing circumstances, and now is the right time to assess how to ensure boards are equipped with the knowledge and expertise to keep pace.
It is also important that scale does not come at the expense of the member voice as the system continues to consolidate from single-employer trusts into master trusts. We strongly recommend boards use sub-committees as a practical way to ensure member views are still being properly represented.”
TISA’s key priorities to strengthen trustee governance:
- Modernise trustee capability expectations so boards can appropriately respond to issues such as VfM and private asset investment as well as the increasing role of technology, AI and behaviour science.
- Protect the member voice using sub-committees to maintain representation and scrutiny as schemes consolidate into master trusts.
- Keep The Pensions Regulator’s Trustee Toolkit current and practical, especially important for smaller schemes and lay trustees.
- Introducing a mandatory accreditation to set a clear baseline for professional trustees, as DWP proposes.
TISA also notes that governance changes should be assessed in the context of the wider reform pipeline, including Guided Retirement, Targeted Support and Pension Dashboards, where the quality of trustee decision-making will be critical to how effectively schemes deliver consistent, comprehensible member outcomes.
ENDS
Notes to Editors:
- TISA’s full submission to the consultation is available on request.
- TISA is a not-for-profit membership organisation committed to improving the financial wellbeing of all UK consumers by working collectively with the financial services industry to deliver solutions and champion innovation, for the benefit of people, our industry, and the nation.
- TISA has approximately 270 member firms involved in the supply and distribution of savings and investment products and associated services. Members include the UK’s major investment managers, retail banks, online platforms, insurance companies, pension providers, distributors, building societies, wealth managers, third party administrators, FinTechs, financial consultants, financial advisers, industry infrastructure providers and stockbrokers.