New guidance published by The Pensions Regulator aims to improve the equality, diversity and inclusion of retirement plan boards.
The regulator published its guidance, which was developed with an industry working group, for the governing bodies of retirement plans and sponsoring employers, on Tuesday.
Among recommendations in the guidance are pointers for chairs of retirement plan boards, such as engaging with the employer to share the benefits of diversity and skills gaps on the governing body; advice for employers when it comes to appointing a chair; and a suggestion for assessment of the governing body's performance on how well EDI has been and continues to be embedded into processes.
In order to enhance the diversity of a retirement plan's board, governing bodies should regularly review and assess members' diversity and life experiences, expertise and skills, TPR said. The regulator also highlighted existing legal duties for governing boards under the U.K. Equality Act 2020, which requires that reasonable adjustments are made for candidates and existing trustees with disabilities, such as changes to premises, equipment and technology, or to the role.
For the employer, the guidance encourages the potential to widen the pool of candidates to join governing bodies, moving beyond senior management roles.
TPR also included guidance on communicating and reporting for defined contribution plans, with the aim of helping to ensure that communications with participants consider diverse backgrounds, needs and vulnerabilities. The guidance said all communications should be checked for bias and to ensure they avoid stereotypes.
"Harnessing diverse views can help pension scheme governing bodies weigh issues in more detail and openly consider aspects important to those impacted by their decisions," said Louise Davey, director of regulatory policy, analysis and advice, in a news release accompanying the guidance. "This enables all those involved to better understand and mitigate scheme risks, avoid unintended consequences, and learn from what is working and what is not."
A retirement plan's governing body includes trustees of defined contribution, master trusts, defined benefit and hybrid plans.
A spokesman for TPR said the guidance covers equality, diversity and inclusion "in the broadest sense and is not specifically tailored to one characteristic or group of characteristics."
The guidance was welcomed by Susan Hoare, partner at Aon, who said in emailed commentary that the guidance is "an important step in the right direction. My experience is that many boards are keen to embrace EDI but don't quite know where to start in a pensions environment."
