Under rules which came into force in April 2015, occupational pension schemes providing DC benefits (other than where the only DC benefits are AVCs) must have a chair of trustees (the Chair) in place.
One key duty of the Chair is to sign an annual statement, covering a number of scheme governance activities. The statement will be available to members in the same way as the annual report and must be published within seven months from the end of the scheme year to which it relates. This means that the first statements will need to be produced for scheme years ending on or after 6 July 2015 (covering periods from 6 April 2015) with the first statements required in February 2016.
Trustees (including the Chair) should be making sure that they are carefully monitoring the various elements covered by the statement.
Further guidance is expected from the DWP on the content of the Chair's statement. The draft DC Code of Practice, issued in December 2015, provides some general comments including:
- an expectation that the statement is written in such a way as to provide a meaningful narrative of how, and the extent to which, the governance standards have been complied with;
- the measures the trustees have taken to achieve compliance should be clearly set out;
- details of how they reached their conclusions on the extent of compliance should be included; and
- trustees are expected to contemporaneously document and be able to evidence the actions described and explained in the statement.
The draft Code will not come into force until the summer, but it is still worth taking it into account when preparing statements which are due before then. Further guidance to supplement the Code is expected from the Regulator on various matters to be included in the Chair's statement (including assessing value for money).
We are able to help trustees draft or review their annual statement.
|Contents of the Chair's statement
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.