The general code of practice

The code’s been a long time in the making. This has given us, as an industry, a long time to worry about the amount of work that will be needed to demonstrate compliance once it comes into force. However, based on what we know, for well-governed schemes the code should be an evolution – not a revolution – for governance.

This means that the real challenge for each scheme will be whether they can use the new code to drive genuinely good governance that will have a meaningful impact on member outcomes.

How did we get here? A brief recap

You’d be forgiven for forgetting how and why the code came into being. Here’s a brief recap:

  • March 2014 – the European Commission first published its draft of the Institutions for Occupational Retirement Provision Directive (IORP II). Its goal is to set “common standards ensuring the soundness of occupational pensions and adequately protecting pension scheme members and beneficiaries”.
  • January 2017 – IORP II came into force, requiring member states to implement its requirements into national law within two years.
  • October 2018 – the UK published regulations (the governance regulations) to implement the key governance elements of IORP II.
  • January 2019 – the governance regulations came into force, replacing the requirement for occupational pension schemes to have adequate internal controls with a requirement for “an effective system of governance including internal controls“. The regulations also require the Pensions Regulator (TPR) to produce a code of practice covering the effective system of governance, and other prescribed matters.
  • March 2021 – TPR published a draft single code of practice consolidating and updating 10 of its existing codes into a modular format designed to be more easily accessible, update-able and web-based. The code puts the capital letters into effective system
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