ICAEW has issued updated guidance on master trusts in a bid to help pension trustees demonstrate good governance standards, by bringing its voluntary assurance framework in line with current legislation and codes of practice issued by The Pensions Regulator
The updated guidance, which follows an ICAEW consultation on proposed changes to the assurance reporting on master trusts, provides for greater trustee responsibility of control processes related to governance.
The consultation received ten responses from a range of stakeholders including master trust providers and advisers. It focused on two issues: the alignment of control objectives with corresponding guidelines set out in the Regulator’s DC code and DC guidelines, and rationalising the number and nature of control objectives.
Generally all responses supported the realignment of control objectives to regulatory DC guidelines, with one respondent highlighting two additional areas where this could be achieved, namely reference to discontinuance plan and fitness and propriety control objectives. The number of control objectives has now been reduced to 27 in total.
Henry Irving, ICAEW’s head of audit and assurance faculty, said: ‘Good governance is fundamental to pension trustees’ duties. People who enrol in master trusts expect to retire with a fair income in the future. That is why it is important that master trusts embrace high standards of practice.’
Andrew Warwick-Thompson, executive director for regulatory policy at The Pensions Regulator, said: ‘The master trust assurance framework continues to provide an important tool for schemes to demonstrate they are well governed and sustainable and so we welcome the changes announced today by ICAEW that reflect our new DC code.
‘I am also pleased that the changes to the framework encourage trustees to take greater responsibility for governance processes, something we are also calling for in our work to drive up standards of trusteeship. The framework allows trustees to assess their governance systems and processes and to prepare for the changes announced in the Pension Schemes Bill.’
The ICAEW technical release, Assurance reporting on Master Trusts (Master Trust Supplement to ICAEW AAF 02/07), Amended 30 November 2016, is available here.
The consultation responses are here.
