If you are a pension scheme trustee, there is a risk that you might be considered a professional trustee without realising, and be subject to new standards for professional trustees that were published earlier this year. A new system of accreditation for professional trustees is also being introduced.
Am I a professional trustee?
A professional trustee is defined by the Regulator as “any person, whether or not incorporated, who acts as a trustee of the scheme in the course of the business of being a trustee.” The Regulator would not normally consider a remunerated trustee to meet this definition if they are or have been a member of the scheme, or are or have been employed by or are a director of the sponsoring employer, and they do not act as trustee in relation to any other scheme. For many trustees, being a trustee of another scheme is likely to be the determining factor.
The new standards
The standards apply to all professional trustees and cover areas including fitness and propriety, governance skills, ongoing professional development, behaviour and skills, and managing conflicts of interest. There are additional standards for professional trustees who are the chair of a trustee board, or who are a sole trustee. You can read the full standards here.
The accreditation system
An associated accreditation system will be introduced, which will enable professional trustees to demonstrate they meet the standards, and provide reassurance to those appointing them. This accreditation system is still being finalised, but so far we know that applicants must comply with a ‘fit and proper’ requirement, provide two references, complete the Regulator’s Toolkit, pass the Pension Management Institute’s Level 3 Award in Pension Trusteeship, and complete an online soft skills test.
Once a professional trustee has become accredited, each year they will have to complete an annual attestation stating that they continue to meet the requirements and have completed 25 hours of relevant CPD.
Why is this important?
Many trustees will not realise that they meet the definition of a professional trustee, and therefore fall under the new standards. All trustees should check the full definition to establish this. If you are a professional trustee, you will need to ensure that you comply with the standards, and consider whether you should become accredited.
It is anticipated that final details of the accreditation process (including the structure of the soft skills test and the cost of accreditation) will be released in the next few months. Please click here if you would like to join our pensions mailing list in order to be kept updated on this, and on other pension law developments.