Three-quarters of defined benefit (DB) pension schemes have conducted a gap analysis of The Pensions Regulator’s General Code’s requirements and initiated plans to address deficiencies, according to WTW.
The General Code clarifies scheme governance and administration standards by updating and consolidating ten previous rules of practice. The Code requires gap analyses to be completed immediately as of March 27th to prevent missing deadlines and possibly result in regulatory action.
According to survey results, 41 per cent of schemes gave completion of policy and process documentation top priority, while 12 per cent concentrated on risk management. Few initially addressed board effectiveness and diversity, but most respondents planned development in all areas.
The General Code seeks to improve governance and risk management for the benefit of members, as noted by Jenny Gibbons, WTW’s head of pensions governance, who underlined the significance of steady progress.
Gibbons says: “For those who haven’t started yet, the publication of the Code represents the firing of the starting gun. But the race before us is a marathon not a sprint, with runners making steady progress much more likely to achieve their goals. The General Code is ultimately about improving governance and risk management for the benefit of members.
“It’s very promising that most schemes know where their key focus for the Code requirements will be now. It’s important to look at the direction in which the scheme is heading too. For example, if a scheme has already taken risk out of its funding and investment strategy, then the Board may want to focus on those parts of the Code that spell out a cyber risk management and preparedness approach.
“Similarly, if there is likely to be an upcoming change in the Trustee Board’s personnel, then the scheme may want to focus on Board Effectiveness or Trustee recruitment policy. Each pension scheme’s situation and requirements will be different and these are the areas that a thorough gap analysis should identify.”