workplace-eyeHow are schemes doing?

On 1 August 2019, TPR published research into how many trust based pension schemes are meeting the key governance requirements expected of them.

It found that:

For micro schemes (between 2 and 11 members), only 4% were meeting the requirements.

For small schemes (between 12 and 99 members), only 1% were meeting the requirements.

For larger schemes and master trust arrangements there has been an improvement in the number of schemes meeting all the requirements, which is good news for the industry.

As a result of the findings, many employers are being contacted by TPR regarding micro and small schemes, often resulting in fines for non-compliance, with a typical fine being upwards of £500. However, there is also an associated reputational risk of being named and shamed by TPR for non-compliance.

A number of our clients have recently uncovered issues with pension schemes that they have inherited through either a merger or acquisition. In many cases, the employer was not aware that they had assumed responsibility for the scheme, particularly if it originated in the distant past of a company acquired (or even further down an acquisition history). These legacy arrangements are now beginning to cause increasing headaches.

Typically, employers have found:

  • trust-based arrangements where there are no longer any active trustees or the trustee is the employer 

  • micro or small schemes with few or no members left in active employment

Often the ageing members of these schemes are beginning to wish to access their benefits.

With the ever increasing oversight of such arrangements, it is key that employers take steps to:

workplace-riskinvestigate whether they have any legacy pension schemes as a result of mergers or acquisitions;


workplace-riskconsider whether there is any value to be added by putting in place a governance framework to manage risk of action from TPR;


workplace-riskconsider whether there is an exit strategy to pass the risk onto a third-party such as a pension provider or master trust.


If you have concerns regarding any pension arrangement, please contact our team to find out more about the services we can provide in this important area.


Posted by Richard Guy

Topics: Pensions, investment

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