Why take part in the Trustee Survey 2022 – and what are we hoping to achieve?
Pardon the Interruption
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The role of a trustee has never been more complex. Recession risks are increasing, as inflation is rising while central banks rapidly raise rates. Public markets remain volatile – and the geopolitical environment is riddled with unprecedented tensions and challenges. Here are the key areas of focus for the Trustee Survey 2022 – and why you should take part.
New ESG and governance requirements for all schemes
Despite the challenging macro backdrop, the Pensions Regulator is introducing new governance requirements under its single code of practice.
Not only are UK pension funds required to put in place effective systems of governance and own risk assessment frameworks, but the single code will raise the expectations on ESG risk integration and engagement. Additionally, schemes over £1bn are required to provide TCFD reporting from October this year.
All these changes are taking place while some of the largest UK schemes are preparing for the launch of pension dashboards – including cleaning up member data and connecting to the right systems.
Scheme funding and covenant monitoring are sharp in focus
The Pensions Regulator is also set to publish the new DB funding code later this year, increasing the focus on endgame planning and contingent assets to secure schemes against covenant risk.
The new funding code is expected to introduce changes to how DB schemes are funded and invested. To begin with, all schemes will be expected to work towards a low dependency on their sponsor, which would include de-risking the scheme by its significant maturity date or an alternative measure of scheme maturity. Mature schemes will be expected to invest in low-risk cashflow-matching assets.
Schemes will additionally need to produce a statement of their funding and investment strategy after the new funding code comes into force.
DC pensions are under growing regulatory pressure
The DC pensions industry is subject to several regulatory consultations too.
The ‘stronger nudge’ regulation is already in place, asking occupational pension schemes to signpost members towards guidance provided by PensionWise. Additionally, a DC member engagement season is in the pipeline.
However, value for money requirement may come under review as there are talks about reconciling the approaches taken by the Pensions Regulator and the Financial Conduct Authority.
Meanwhile, the industry is discussing consolidation not only of small DC schemes, but also small individual pots – as well as changes to the charge cap and other regulations aimed at improving access to diversifying investments for DC pension funds.
Why take part in the Trustee Survey?
For an industry confronted with this much change and market volatility, key partners are few and far between.
With 150 responses to our second annual survey and over 500 downloads of the free public report, the Trustee Survey & Report is one of the largest studies of its kind. It offers a forum where trustees can share their experiences and views anonymously.
