In November 2017, The Pensions Regulator (the ‘Regulator’) issued A quick guide to the chair’s statement [PDF]. It aims to clarify how the Regulator expects Trustees to meet the legal requirements in relation to the chair’s statement and should be read alongside the defined contribution (DC) code of practice no. 13, Governance and administration of occupational Trust-based schemes providing money-purchase benefits.
The quick guide includes examples of ‘good’ and ‘poor’ chair’s statements, and a checklist with accompanying notes for Trustees when completing their chair’s statement.
The checklist addresses how Trustees demonstrate they have met requirements in relation to the following areas and presents a list of questions to be considered when providing relevant disclosures:
- default SIP requirements
- core financial transactions
- charges and transaction costs in respect of all funds and whether they represent value for members
- Trustees’ knowledge and understanding
- non-affiliation and encouraging member feedback (for Master Trusts).
The quick guide reminds Trustees that the chair’s statement should be written clearly enough for members to understand, and that the Trustees are personally liable for a fine of between £500 and £2,000 for non-compliant statements.
Trustees should read the quick guide to ensure they are aware of, and are meeting, the Regulator’s expectations with regards to the chair’s statement.
How we can help
At Crowe, we are able to help Trustee’s complete the chair’s governance statement drawing on our in-depth knowledge of standards of good practice set out in regulatory guidelines, as well as support Trustees of occupational DC schemes embed robust governance arrangements.
If you would like to discuss any of these aspects further and how changes considered by this consultation will affect you, please contact your usual Crowe Pensions Funds advisor or Phil Spary, Director in our national pension funds team.