Good governance is critical in running an effective pension scheme
Effective pension trustee governance is not just about having a well run pension scheme. You also need to have the policies and procedures in place that allow you to mitigate risk now and in the future.
Mercer has the pension scheme governance risk management expertise to provide clients with clear advice, which places the member at the heart of everything.
Our governance and scheme management services
We have a comprehensive pension scheme governance service across DB and DC pension schemes, including:
- Trustee effectiveness reviews and Trustee Knowledge & Understanding (TKU) support
- Trustee Training
- Trustee board and committee advice
- Independent/professional trustee role profiles and selection exercises
- Review and appointment of scheme advisers e.g. lawyers, auditors etc.
- Establishment and review of policies and processes, risk register reviews and support with own risk assessments (ORA)
- Scheme secretariat services
- Outsourced pension management services
- E-governance solutions
Our approach to your pension scheme governance
Whether your pension scheme is defined benefit (DB), defined contribution (DC) or hybrid in nature, you cannot run a scheme in today’s regulatory and social climate without having robust governance. The regulatory environment is evolving and new risks are emerging. Trustees of pension schemes need to have effective systems, policies and procedures in place that allow them to mitigate risk and take opportunities both now and in the future.
Mercer can help you develop and maintain an efficient and effective governance framework which meets regulatory requirements and tackles emerging risks including cyber security and climate change. Our pension scheme governance services range from effectiveness reviews and trustee training to fully outsourced pensions management and everything in between. Whatever you are aiming to achieve in improving your pension scheme’s governance model, we are well placed to help you and your pension scheme stakeholders.
There is no one size fits all solution, and good pension scheme governance should be proportionate. We provide clients with solutions to help them meet regulatory requirements as well as bespoke governance consulting to fit their pension scheme’s specific needs. We are also able to leverage our contacts across DB and DC consulting, investment, risk transfer (and more) to provide the right advice and thought leadership as and when it is needed.
Are you General Code ready?
Governance frequently asked questions
In March 2021, the Pensions Regulator (“TPR”) published its consultation on its new code of practice consolidating 10 of the existing codes into one web-based code. It also addressed the governance requirements arising from the UK’s implementation of IORP II and reflected in UK legislation which expects trustees to have an “effective system of governance” (“ESOG”) and for schemes with 100 members or more to complete an “own risk assessment” (“ORA”) to assess the ESOG.
The ESOG is covered under 17 of the new code’s topic specific modules which outline TPR’s expectations around the processes and policies governing the operation of schemes, and schemes will also need to have internal controls in place to manage risk. The new code effectively raises the bar in terms of what is expected from trustees in terms of good governance. There are five key areas that reference the need for an ESOG within the code. Trustees will need to establish and maintain policies covering these areas as well as policies for the review of each element of the ESOG. These policies should be agreed before any review is carried out and all policies should be reviewed at least every three years.
Our pension trustee governance services – your risk management team
In a world where trustees have many tasks competing for their time, robust pension scheme governance is a form of risk management that means trustees can focus on their strategic aims. To achieve good governance, you need a partner who can support you whether you need information, advice, best practice or technology to strengthen your pension scheme governance model.
We have more than 50 experienced consultants and specialists who can provide governance and pensions management services to a wide range of clients responsible for defined benefit, defined contribution and hybrid pension arrangements. We can help you bring together the pension scheme stakeholders, including the corporate sponsor, in order to achieve alignment, make effective decisions and manage risk.
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