The Pensions Regulator has finally published guidance for trustees on dealing with conflicts of interest.
The Regulator’s has identified five "high level" principles which trustees need to bear in mind in managing conflicts:
- Understanding the importance of conflicts;
- Identifying conflicts;
- Evaluation, management or avoidance of conflicts;
- Managing adviser conflicts; and
- Having a conflicts of interest policy.
Where the Regulator becomes aware of a conflict of interest that is not being properly addressed it may intervene.
What should trustees do?
Trustees now need to:
- ensure that they understand their duties in relation to conflicts;
- have in place a process to identify and document the existence of new conflicts;
- Set up a register of conflicts;
- be aware of the need to minute discussions of conflicts that arise in trustees’ meetings;
- ensure that they have a policy which sets out when and how a conflict will need to be managed;
- ensure that compliance with any conflicts policy is monitored and the policy itself is regularly reviewed; and
- be aware of the potential for adviser conflicts and have in place procedures for dealing with them
