Financial News Updates

Trustee Knowledge and Understanding (TKU)

March 17th 2009

What’s changing?

Essentially the original scope guidance covered what trustees needed to know and understand and this has changed very little, updates however will include:

1. The importance of good administration

2. The forthcoming Personal Accounts

3. The trustee/employer covenant

4. Trustee training

5. Buyout issues

6. Winding up.

The Regulator recognises that different requirements apply to different types of scheme. As a result, the main change to the guidance is that it has been broken down into three distinct parts. So along with the code of practice we now have TKU scope documents for:

1. DB schemes (including those with a DC element)

2. DC schemes

3. Small fully insured DC schemes (under 100 members).

4. The idea is that splitting the guidance will remove any confusion for those running schemes about which particular guidelines apply to them.

The guidelines will run through:

1. The legislative requirements for individual and corporate trustees respectively

2. The scope of the body of knowledge and understanding and its application to individual circumstances

3. Levels of knowledge and understanding

4. Acquiring, updating and demonstrating knowledge and understanding, and

5. Conversance

6. The guidance consultation as a whole will be of interest to trustees and most people involved in the running of occupational pension schemes, including those who advise or train them. Feedback on the consultation is invited by 31st December 2008.

7. The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice.

Source: The Pensions Regulator - Refreshed TKU code and guidance published for consultation, October 2008

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