Several pension fund industry experts have called for clarity on The Pensions Regulator’s new code of practice.
The request came as TPR’s consultation on the draft content for a new code of practice that will eventually replace 10 of its existing codes came to an end on 26 May.
“From a practical standpoint, we ask that TPR make it clear where they have made changes to requirements – or added new ones. This will help achieve higher levels of compliance and reduce the administrative burden on schemes, something of particular value to smaller schemes,” said Nigel Peaple, director of policy and advocacy at Pensions and Lifetime Savings Association (PLSA).
He said the application of the code to the Local Government Pension Scheme (LGPS) is often not clear and has asked TPR to provide additional guidance and support to funds on this issue.
Ian Colvin, head of LGPS benefit consultancy at Hymans Robertson, said: “It is important to note that the new code set out by TPR does not extend the regulator’s powers in the LGPS beyond its existing remit on governance and administration.”
He added: “We remain concerned about how governance arrangements within the new code will fit with both local authorities and LGPS funds.”
Colvin noted that the module on recruitment to the governing body does not reflect existing constitutional arrangements in line with local government legislation, for example compliance with political proportionality.
“It would have been helpful for the code to recognise the makeup of LGPS administering authorities as distinct entities, with acknowledgement that LGPS schemes operate in unique legal frameworks,” Colvin said.
He added that “more clarity should be provided around the definition of governing bodies” as there is explicit reference to local pensions boards.
“This is clearly misleading given local pensions boards are unable to exercise decision making powers and are instead in place to assist the scheme managers, who have such powers,” he said.
Furthermore, “whilst TPR should be commended for trying to streamline documentation, the end result is somewhat overwhelming,” said Claire Whittaker, head of governance consulting at Isio.
“Rolling 10 of the existing codes into one, whilst putting defined contribution, defined benefit and public sector pensions guidelines into a single document and then throwing in a number of new elements for good measure is like attempting to write one rule book for cricket, rounders and baseball,” she explained.
She said that it would have been easier to split the changes into two phases of bringing in the new elements and then at a later date, combining the codes.