Professional trustees now have to seek accreditation and meet new regulatory standards, designed to stamp out poor practice in the sector.
Details of these new standards have now been published by the Professional Trustee Standards Working Group (PTSWG).
Professional trustees will have to demonstrate that they meet these standards, which include fitness and propriety, governance skills, ongoing professional development and managing conflicts of interest.
There are additional standards for professional trustees who chair or are the sole trustee on a board.
Professional trustees are playing an increasingly important role in the pensions sector, with the rapid growth of master trusts. As a result regulators want to ensure they have a greater level of expertise, knowledge and skills – and meet higher standards regarding that other trustees when it comes to a duty of care to members.
To hold accreditation, professional trustees will have to pass an initial application. To ensure that they are deemed ‘fit and proper’ to remain in this post, they will also have to complete relevant professional development on an ongoing basis.
PTSWG chairman Andrew Bradshaw – who is also a council member of the Association of Professional Pension Trustees – says: “I am delighted to announce the publication of the standards and accreditation framework, which follows an extensive period of consultation with our fellow professional trustees and the advisory community.
“We are now focusing on implementing the accreditation framework. Professional trustees will be able to begin the process to becoming an accredited trustee once this last step has been finalised.”
The Pensions Regulator executive director for regulatory policy David Fairs adds: “Professional trustees are a valuable part of pension scheme boards, bringing vital knowledge and experience, which helps to ensure schemes are well run and provide good outcomes for members.
“This robust accreditation framework will help to ensure that professional trustee appointments are high quality and meet the standards that TPR expects.”
The Association of Professional Pension Trustees Council will take on responsibility for maintaining the standards and will also oversee the accreditation framework, which will be run by the Pensions Management Institute (PMI). The framework is expected to be launched later this year.
PMI chairman Alan Whalley adds: “The Pensions Management Institute already supports over 1,000 trustee members by providing lifelong learning to improve knowledge and skills.
“Running the accreditation process is a natural extension of this work and we are pleased to be able to play a key role in this important initiative to drive up standards.”