Every employer that operates a pension scheme is obliged to arrange appropriate training for the scheme’s trustees. The only exception to this requirement is where a scheme has a professional or pensioner trustee. Trustees must receive training within six months of their appointment and at least every two years thereafter.
The areas that must be covered
Trustees are required to receive training on a range of areas. The Pensions Act 1990 and regulations made under it must be covered, together with any other areas of general application to governing and operating pension schemes. Such areas might include, but are not limited to:
The pension provisions of the Family Law Acts
Financial regulation and scheme financing
EU Directives, such as the IORP II Directive, and transposing Regulations
Relevant areas of employment law
Scheme administration such as record keeping and the payment of benefits
Overall, the Pensions Authority accepts that trustees can use their own judgment in deciding what constitutes appropriate training for them. This decision should be based on each trustee’s own knowledge, experience and expertise.
Supervision & breaches
It is the responsibility of all trustees to maintain their own training records and include in their scheme’s annual report. More broadly, all schemes are subject to compliance and regulatory audits by the Pensions Authority which may include a review of trustee training records.
If the Pensions Authority finds that a trustee has failed to complete appropriate training they may be subject to an on-the-spot fine. Where employers are found to be in breach of their obligation to provide training they may be prosecuted by the Pensions Authority.
Arranging trustee training
The Pensions Authority maintains a register of trustee trainers and any one of these organisations may be selected to provide the training. Where a training need is identified, contact should be made with a training organisation and a date chosen where it is possible for all trustees to attend.
The trustee training requirement should not be ignored or forgotten. As well as the potential penalties for not complying with the Pensions Act, trustee training can provide vital information. Particularly on legal, regulatory and financial matters that trustees must have when making decisions in respect of the operation of their schemes. Whenever a new trustee is appointed to a board, the training requirement should be addressed as quickly as possible.
The Pensions Team in Mason Hayes & Curran LLP are a registered provider of trustee training, please contact a member of the team if you have any queries in respect of trustee training or if you wish to arrange a training session.
The content of this article is provided for information purposes only and does not constitute legal or other advice.