UK Update: New pension trustees are often surprised by how much they have to learn.

While the law gives them six months to get up to speed with the basics, the requirement to keep learning will continue throughout their trusteeship.

Increased regulatory burden for pensions trustees

In recent years pension scheme trustees have had to keep on top of a significant amount of regulatory and legislative change as well as increased governance requirements.

The range of topics to be mastered is varied and vast, and recent additions include the impact of climate change, transfer scam prevention, pension dashboards, equalisation of guaranteed minimum pensions and increased regulatory powers.

It can seem overwhelming – but trustees must ensure their pensions knowledge keeps pace with the ever-changing landscape.

This burden has not gone unnoticed.

The Work and Pensions Secretary announced at a conference last week that the DWP would make 2023 ‘the year of the trustee’, with support to be provided to trustees through a programme of education and promotion of best practice.

The penalty for pension trustees failing to comply with statutory requirements

A recent case is a timely reminder of the legal obligation on trustees to have and maintain the knowledge necessary to carry out their role – and that a lack of knowledge and understanding is not a reasonable excuse for failing to comply with regulatory requirements.

In Ease & Co (Banquette Seating) Ltd v TPR, the Pensions Regulator issued a penalty notice for a failure by the trustee of a defined contribution scheme to comply with the statutory requirement to prepare an annual governance statement within the required period.

The trustee challenged this on the basis that the failure was unintentional and arose because the trustee did not know about this legal requirement.

The court confirmed that the statutory obligation on trustees to have sufficient knowledge and understanding of pensions and trust law to enable them to carry out their trustee functions is clear and unequivocal.

While the court was understanding that the scheme involved was a small scheme provided by a small company, the court emphasised that the knowledge requirement applies ‘across the board’.

How can pension trustees avoid the pitfalls?

Recent trends show that more schemes are appointing professional independent trustees to assist with navigating the ever-changing regulatory landscape and to bring extensive experience to the trustee table.

If you would like to discuss how we can help your trustee board with training, or the services our independent professional trustee company can provide, please get in touch for a chat.

By Margaret Meehan, Burness Paull LLP, Scotland, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact ukscotland@transatlanticlaw.com

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