New guidance on Chair’s statements in DC schemes
The Pension Regulator has issued updated guidance on the requirements for trustees to be compliant in relation to the Chair’s statement.
The guidance sets out the legal requirements in relation to the chair’s statement and the expectations of how trustees should meet them (this should be read alongside Code number 13: ‘Governance and administration of occupational trust-based schemes providing money-purchase benefits’).
The guidance contains a checklist for trustees to use to ensure that they are compliant, together with examples of good practice and common mistakes. The overriding principle remains that the statement must be written clearly enough for members to understand, despite the fact that there are a number of technical areas which must be covered.
In the event that the statement is non-compliant, trustees or managers of the scheme will be personally liable to pay a fine of between £500 and £2,000.
According to The Pension Regulator’s Annual Report and Accounts 2017-2018 published in June 2018, 150 penalties were issued last year for breaches in providing a chair’s statement, totalling £102k, although two were subsequently revoked.
The Pension Regulator’s Chief Executive is quoted as saying, at the Professional Pensions conference in June 2018, that the guidance will be applied retrospectively and could even result in some revocations of penalties.