Mandatory Training Requirement on Pension Scheme Trustees
June 2nd, 2010 by Ennis Chamber
- Martin Guerin
Are you an Employer?
Are you a Trustee of your company Pension Scheme?
Mandatory training for Trustees of pension schemes has been introduced from 1st February 2010 under the Pensions Act. In many pension arrangements, the employer acts as Trustee. Many concerns have been expressed on the impact on these schemes.
Firstly let us deal with the new requirements, which broadly are:
Employers are required to arrange appropriate training for the Trustees of the pension scheme, unless the Trustee is a Professional Pensions Trustee or Pensioneer Trustees (who are regarded as having specialist pension knowledge and who are expected to arrange their own training.).
For existing Trustees at 1st February 2010 – the training must be completed within 2 years i.e. completed before 31st January 2012 and at least every 2 years after that.
- Trustees appointed after 1st February 2010 must complete Trustee training within 6 months of their appointment and at least every 2 years after that.
- Where a scheme must produce a Trustee Annual Report, the report must include confirmation as to whether the Trustees have completed the required training.
- Employers who breach their obligation to arrange appropriate training may be prosecuted.
- Trustees who fail to undertake appropriate training may be subject to an on-the-spot fine
- Trustees of schemes providing Death in Service Benefits only are not required to complete training.
Basically as Trustees look after money i.e pensions on behalf of employees, they must have certain knowledge of pensions, administration and must have systems in place to protect the members.
What to do now?
Employers acting as the Trustee of a pension arrangement need to consider the implications of mandatory Trustee training for them. While the timescale for existing company directors to complete Trustee Training is 2 years, new directors must complete the training within 6 months of their appointment. Employers intending to make alternative arrangements for Trusteeship need to review their options sooner rather than later, so that there is sufficient time to complete these arrangements.
