Complying with the AAF requirements for the APPT PCST Code relating to sole trusteeships

By Assure UK | May 4, 2022

The Relevant Trustee AAF 02/07 is used to create a specific assurance standard for Professional Pension Trustee firms (Relevant Trustees).The Relevant Trustee AAF 02/07 TECH 04/13 has been adopted as a quality standard for sole trusteeships by the Association of Professional Pension Trustees (APPT) whose principal objective is to act as the representative body of trustees of UK Occupational Pension Schemes who fall within the Pensions Regulator’s (tPR) description of a Professional Trustee.

In October 2020, the APPT announced a new APPT PCST Code of Practice that became effective from 1 January 2021 for Professional Corporate Sole Trustees which included obtaining a Relevant Trustee AAF 02/07 assurance report for the Professional Trustee firm.

We have filmed a webinar on this topic which you can access for free here.

What is a Relevant Trustee AAF 02/07?

  • A target set to meet 23 Control Objectives set by the ICAEW
  • A report that requires a minimum of 60 control activities by the organisation showing how the control objectives are achieved by processes in place
  • An Assurance Report to which an ICAEW audit firm gives an independent audit opinion
  • Used by organisations to demonstrate their control activities work as described within the report

What are some of the key areas of an AAF 02/07?

  • Administrative and Accounting
  • Risk Management
  • Information Technology

What is the APPT Sole Trustee Code?

The code sets out how members should satisfy themselves that their firm has appropriate governance and risk controls in place to meet the additional requirements for Sole Trustee appointments.

The code, which will be reviewed on an annual basis, is principles-based and for the PCST firms to determine the detail, as they see appropriate, in their own processes and procedures.

Adopt robust governance

Robust governance protocols to ensure that they manage potential conflicts of interest effectively and maintain independence from the sponsoring employer.

These include, for instance, maintaining a Sponsoring Employer Independence Policy, as well as assessing whether to report to tPR if they are removed, from a PCST appointment as a result of the actions of the sponsor procedures to ensure that they can evidence that adviser appointments are not influenced by business or personal relationships between the firms involved.

Manage conflicts of interest for PCST appointments

Under the code, PCST firms should implement due diligence procedures to ensure that they properly document their appointment as a PCST for a scheme and can show that they have considered whether it is appropriate to accept the appointment processes governing how decisions are taken and recorded.

What can you be doing now?

  • Highlight your key processes and review in line with the 23 Control Objectives
  • Identify any gaps and put processes and procedures in place.

Get in touch for further information on how to obtain a Relevant Trustee AAF 02/07 report with independent assurance.

To get a copy of the 23 Control Objectives please send your request to info@assureuk.co.uk.

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