TECH 05/20 AAF 05/20 provides more guidance on Trustee requirements

Assurance reporting on Master Trusts

This new technical release provides guidance on the performance of assurance reporting on Master Trusts governance control activities.

It is effective for reporting periods beginning on or after 31 March 2020.

Early adoption of the guidance is encouraged.

This replaces previous assurance reporting on master trusts (TECH 12/16 AAF) with updated control objectives aligned to the Pensions Regulator (TPR) Supervisory regime.

Areas covered are:

  • Value for members
  • Investment governance
  • The trustee board
  • Financial sustainability and compliance
  • Scheme management skills
  • Trustee oversight of IT systems and administration processes
  • Data quality
  • Communication and reporting.

TECH 05/20 AAF provides guidance for those undertaking assurance engagements on the governance control activities established by trustees of Master Trusts.

Produced with input from The Pensions Regulator (TPR), the Technical Release provides the know-how to help to scope and perform these engagements effectively.

The guidance is also intended to help promote consistency in approach.

Notable focus points in 05/20 relating to Trustees

Four of the 32 control objectives relate to the trustee board.

Trustee Appointment

Any new trustees will be recruited and appointed in accordance with a documented procedure. This should be approved by the Trustee Board. If an alternative approach is followed, which leads to the process not being followed, the rationale for this should be provided along with consideration for whether the formal process is still fit-for-purpose.

Assurance reporting on Master Trusts: Trustee Fitness

Trustee fitness and propriety should be assessed prior to appointment and reviewed annually in accordance with a documented policy.

Trustee Board Skills and Competencies

The skills and competencies of the Trustee Board to be reviewed on an annual basis. A documentation of this review will then be approved by the Trustee Board. There should also be a plan to address any gaps

Assurance reporting on Master Trusts: Trustee Levels of Knowledge and Understanding

A Trustee Board approved training and development plan will be in place to manage trustee levels of knowledge and understanding. This training will take place on an annual basis.

During the review of the training and development plan, the following matters will be addressed:

  1. Identification and address of any ongoing learning needs of trustees on an individual basis; and
  2. Closing any gaps in the overall competencies of the Trustee Board.

There are other areas of focus for assurance reporting on master trusts which will be covered in other posts from Assure UK.

The technical release is freely available to ICAEW members and faculty members. Non-members can buy the technical release for £25 in the ICAEW shop.

Visit our page for more information on Assurance Reporting.

If you want to find out more about AAF 05/20 guidance improving for your assurance reporting on master trust and/or your trustee board skills and competencies, please contact us on 020 7112 8300 or email us on info@assureuk.co.uk.