The Regulator has stated that the revised description of who it considers to be a professional trustee and confirmation of its monetary penalties policy are part of its 21st Century Trusteeship campaign designed to protect workplace pension savers by promoting compliance with pensions legislation and driving up the standards of governance across pension schemes.
Higher standards are expected from those meeting the professional trustee description and it is likely that higher penalties will be imposed for those who fail to meet their duties. It is therefore important for any person appointing a trustee to a pension scheme to determine whether a trustee meets the new description.
In terms of the policy a professional scheme trustee "includes any person, whether or not incorporated, who act as a trustee of the scheme in the course of the business of being trustee".
The Regulator makes clear that they will consider all relevant factors and indicators before forming an opinion on whether someone is acting in the capacity of a professional trustee.
A number of illustrative examples are also provided to assist and some key points to note are as follows:
Remuneration alone is not determinative.
Remunerated trustees who are either a member of the scheme or employed by an employer connected to the scheme and do not act as a trustee in relation to an unrelated scheme would not be regarded by the Regulator as acting in the course of business.
Expertise in trustee matters.
Individuals who represent themselves to one or more unrelated schemes as having expertise in trustee matters generally whether they are receiving remuneration or otherwise would usually be considered to be acting in the course of business of being a trustee. However, expertise gained by a long tenure as a trustee to a specific scheme will not in itself satisfy the definition but may be taken into account when calculating any penalty for a breach of pensions legislation.
Scheme return classification is not determinative.
Although trustees are required to identify in the scheme return whether any are professional trustees, the Regulator may determine otherwise on the facts of the case.
Independence is not determinative.
Professional trustees are not always independent.
Where there is a breach of pensions legislation the Regulator has a range of enforcement options including the power to impose discretionary and mandatory monetary penalties.The Regulator states that the underlying objective in imposing a monetary penalty is to punish wrongdoing, deter repetition and act as a warning to others. The Monetary Penalties Policy sets out how the Regulator will generally use its powers to impose monetary penalties including the statutory thresholds which must be satisfied, the factors that will be taken into account, and the principles used in determining the amount of the penalty.