The Pensions Regulator (TPR) has published research finding that small pension schemes have less developed arrangements to identify and manage risks to members’ savings. Trustees are being urged to assess whether their governance, skills and capabilities support increasingly complex decisions, including whether consolidation would serve members’ interests. Only 27% of small defined contribution schemes had formal governance arrangements, compared with 94% of large defined contribution schemes and 89% of master trusts. Larger schemes and those with professional expertise were more likely to achieve higher governance scores. Succession planning was another gap: fewer than half of defined benefit and defined contribution schemes, excluding micro schemes, reported having a plan for future trustee appointments. TPR expects trustees to benchmark governance against its general code, strengthen succession planning and board development, and keep member outcomes central to decisions. Only 29% of boards identified improving member outcomes as their primary decision driver, while 55% gave it equal weight alongside priorities such as regulatory compliance and cost. The survey, TPR’s first to measure trustee governance practices across the market, establishes a baseline for tracking changes as the pensions market and regulatory framework develop.
UK’s Pensions Regulator finds formal governance arrangements at only 27% of small defined contribution schemes
Research by the UK’s Pensions Regulator found formal governance arrangements at 27% of small defined contribution schemes, against 94% of large schemes and 89% of master trusts. Trustees are being urged to assess their governance against the general code, strengthen board skills and succession planning, and consider consolidation where it benefits members.