UK consultancy Hymans Robertson has launched a governance service for corporates’ defined benefit pension (DB) schemes, recognising that governance strategies for corporate pension funds need to be increasingly robust, especially with the country’s increasing regulatory scrutiny.
The new service aims to help companies develop thorough oversight of their scheme and ensure that the right people are involved in discussions about pension funds’ strategic decisions. This, Hymans Robertson said, is increasingly important as they move toward endgame planning.
The service has been designed to help corporates enhance effectiveness in collaboration with trustees and deliver wider consistency within company governance policies.
Hymans Robertson claims it will help pension funds to make sure they are aligned with the regulatory direction of travel and provide comfort on the governance standards in place. It added that ensuring trustee effectiveness will be another benefit of the service, helping companies demonstrate to The Pensions Regulator (TPR) that they have carefully considered all necessary elements to meet their scheme members’ needs.
Laura Andrikopoulos, head of corporate governance at Hymans Robertson, said: “TPR has rightly recognised that the pensions landscape is being challenged by domestic and global economic issues. Within this new pensions landscape, corporates must be able to demonstrate that their governance arrangements are robust and that plans are in place to address any areas of concern.”
She said that it is “paramount” to remember that just because a governance structure is in place, it doesn’t mean that it will remain the right one for the scheme.
“With this in mind, corporates must be prepared to revisit their governance on a regular basis to ensure what is in place remains fit for purpose.”
Andrikopoulos pointed out that TPR’s areas of focus provide a “useful starting point”, covering areas such as conflict management, separation of decision-makers from advisers, remuneration models and quality of decision-making.
She added that DB pension scheme decisions are becoming “much more complex”, particularly as funds head towards the endgame and now with the added complexity of surplus management.
She said: “With increased regulatory scrutiny, especially on trustee appointments and oversight, the ability to demonstrate robust, fit-for-purpose governance is critical.
“Aligning pension scheme governance with wider corporate governance principles not only ensures compliance but also builds resilience and trust in a rapidly evolving environment.”
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