Commenting on TPR’s single Code of Practice, Laura Andrikopoulos, Head of Governance Consulting, Hymans Robertson says:

“We look forward to clarification from The Pensions Regulator on a number of areas in the new consolidated Code of Practice, particularly in the interaction between the requirement to demonstrate an Effective System of Governance and the annual requirement to report on the ‘Own Risk Assessment’ (ORA). The ORA as currently framed is a governance review of key policies and processes which are part of Trustee risk controls and which would be covered in any assessment of effective governance.

“The new web-based modular format and the collation of existing guidance into a resource available in one place along with plans for a clear process for regular updating are welcome. We would like, however, to see greater emphasis on the people and culture aspects of good governance, such as effective board dynamics as measured by Trustee effectiveness reviews and a recognition that good board culture lies at the heart of great governance.”

Commenting on TPR’s consultation on a new single Code of Practice and the implications for LGPS, Ian Colvin, Head of LGPS Benefit Consultancy, Hymans Robertson said:

“We welcome TPR’s consultation on the new Code, particularly with MHCLG developing the Scheme Advisory Board’s Good Governance recommendations; together these underlie the importance of funds having strong governance arrangements in place. This is a key area that should be a focus for pension committees and boards over the next year.

“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.

“We remain concerned about how governance arrangements within the new code will fit with both local authorities and LGPS funds. 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. We believe 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.”