Trustee Knowledge and Understanding (TKU) Policy

Induction

The Pensions Act 2004 states the obligations of trustees which include having relevant knowledge and understanding. Relevant knowledge and understanding is defined in the following way:

• Trustee Directors must be conversant with:
  • the trust deed and rules of the Scheme;
  • any statement of investment principles;
  • the statement of funding principles (defined benefit schemes only); and
  • any other policy document adopted by the Trustee relating to Scheme administration
• Trustee Directors must have knowledge and understanding of the law relating to pensions and trusts, and the principles relating to:
  • the funding of occupational pension schemes;
  • the investment of the assets of those schemes; and
  • climate change and environmental, social and governance matters.

Trustee Directors also need to understand how the Scheme works, including the rules that govern it. To meet this requirement The Pensions Regulator (TPR) expects Trustees to have the relevant knowledge and understanding to perform the role within six months of their appointment.

To help Trustees to gain this knowledge the Scheme’s Trustee Directors are expected to have completed TPR's Trustee toolkit within six months from appointment as a Trustee Director. The Trustee Toolkit is a free online learning programme that helps Trustees gain the relevant skills, knowledge and understanding. It is required study for new trustees, unless you can find alternative learning that covers the same areas at a level relevant for you and within the timescale allowed.

TPR has documented what new pensions trustees need to know and understand and has produced a Guide for a new Trustee. Both of these resources can be found on TPR’s website.

To meet these requirements, new Trustee Directors will:

• be provided with an introductory pack providing information on the Scheme, and where to find additional information;
• be directed to the Scheme’s Sharepoint site, which contains all of the documentation related to the Scheme, in order to familiarise themselves with this documentation;
• attend training sessions with the Scheme’s Advisers to cover the key aspects of trusteeship, how it relates to the management of the Scheme and to familiarise themselves with key Scheme specific information;
• work with the Pensions Team to identify any gaps in skills and knowledge which the Pensions Team will arrange to address; and
• be expected, as a matter of good practice, to complete TPR's Toolkit, www.thepensionsregulator.gov.uk/trustees.aspx within 6 months of appointment.

Ongoing Training

The Pensions Regulator (TPR) expects trustees to be able to demonstrate their maintenance and updating of knowledge. While there is currently no prescription on time spent doing this, this policy is formulated around TPR's stated indicative figure of 15 hours per year, with Trustee Directors expected to aim for that as a minimum. This is dependent on individual requirements, and Trustee Directors may wish to augment this, or utilise other relevant CPD for a dual purpose. It is acknowledged that Trustee Directors will have differing needs, and this requirement can be tailored around those. Any specific requirements which Trustee Directors have identified may be raised via the Pensions Team. The Pensions Team will also work with Trustee Directors, in conjunction with the Chair to identify any gaps in skills and knowledge on a regular basis, and arrange appropriate training sessions to fill those gaps as necessary.

As a guide, annual training may be made up of the following:

• 3-5 hours formal training provided to the Trustee Board on specific topical matters, or related to specific business which the Trustee Board is carrying out at the time or as preparation for upcoming items within the business plan. The Pensions Team will work with Advisers to determine relevant training topics, and Trustee Directors are encouraged to let the Pensions Team know of any topics that they would particularly welcome a training session on;
• 1-2 hours in-meeting training – often Trustee Board and Committee agendas will include Adviser sections which introduce a particular topic and will include specific training;
• 2-3 hours seminars / webinars provided by the Scheme’s Advisers, Providers and Fund Managers (usually these are free, and can provide good updates and additional knowledge on specialist areas). Trustee Directors are also welcome to attend paid courses if they feel there is a need. This can be arranged via the Pensions Team.
• 5-10 hours on private reading. If you wish to utilise industry publications such as Professional Pensions and Pensions Expert, you can log onto their website and register to receive news updates which will link to the latest publication. For Trustee Board meetings, Advisers will provide an industry update in the meeting packs, which can also be included in private reading. Information is also included on TPR's website and is another excellent source of reading materials.

Training Logs

The Pensions Team will keep a Training Log for Trustee Directors, which will be regularly updated with any centrally provided training and tabled at each Trustee Board meeting for review and comment.

Trustee Directors are required to advise the Pensions Team of any training attended privately and, at least once a year, update the Pensions Team with any informal training / reading undertaken to maintain and update TKU.