Employers are expected to find it more difficult to recruit trustees for their pension schemes as new regulations were announced. The Pensions Regulator, the new regulatory body looking after occupational pension schemes, has issued a consultation document that sets out what it expects trustees to know from April 2006.
Trustees will be expected to have "sufficient knowledge and understanding of the pensions and trust law, and of the principles of funding occupational schemes and the investment of scheme assets, to run their schemes properly. They should also be ‘conversant with’ their own scheme’s documents". The consultation period ends in June 2005 and the code is likely to be issued in the autumn.
Mike Dowding, head of technical services at PIFC Consulting, said that by introducing more rules for trustees, employers may find it difficult to find suitable candidates. This might encourage organisations to move towards more contract-based pension schemes such as stakeholder or group personal pension plans. The code sits alongside a number of other regulations still to be issued by the government on the final details of both the Pensions Act 2004 and the Finance Act 2004 that will enable employers to finalise changes..