20 July 2006
The Pensions Regulator's code of practice on internal controls has been
laid before Parliament.
The code of practice on internal controls gives guidelines to
trustees and managers of occupational pension schemes on how to
meet legislative requirements, as well as outlining the regulator's
expectations in relation to the assessment of risk, implementation
and review of adequate internal controls.
A sound internal controls environment has always been a key
feature of a well run pension scheme, ensuring better security and
protection of members' benefits as well as demonstrating good
scheme governance.
Article 14 (1) of the European Directive 2003/41/EC on the
Activities and Supervision of Institutions for Occupational
Retirement Provision now places an obligation on member states to
ensure that pension schemes have adequate internal control
mechanisms. The Occupational Pension Schemes (Internal Controls)
Regulations 2005 (SI 2005/3379) bring the UK into line with this
directive.
The Pensions Regulator head of
policy and guidance Sue Rivas said: "The controls mitigate risks
and help to ensure problems are detected at an early stage. The
regulator recommends that trustees develop a risk management
framework to assess the adequacy of internal controls."
