The Pensions Regulator

Trustee training: the trustee toolkitArticles

Trustee training - the trustee toolkit

The latest modules to be released as part of the regulator’s trustee toolkit e-learning programme return in more detail to the issues of fund management. Terry Clayworth, head of the team behind the toolkit, introduces us to these modules and the toolkit in general.

The trustee toolkit, http://www.trusteetoolkit.com/, is nearing completion. Covering the trials and tribulations of a fictional trustee board, in the very first module of the toolkit the learner is invited to stand for election as a trustee of this board, and learns about the role of the trustee and the nature of pension schemes. An insight into pension law then follows, and subsequent modules deal with the four main asset classes, the funding of DB schemes and issues relating to DC arrangements.

The latest modules, which complement each other, delve into investment matters. The first, ‘Fund management’, sees the fictional trustee board considering the performance of their equity fund manager. The trustees discuss the merits of active and passive approaches to fund management, and of growth and value managers. They also look at areas of corporate governance, including shareholder activism and ethical investment. In the second, ‘Asset allocation’, the trustees consider their attitude to risk and review their Statement of Investment Principles (SIP).

The framework behind the toolkit

The toolkit is based on the ‘scope guidance’ produced by the regulator in connection with the trustee knowledge and understanding (TKU) requirements set out in the Pensions Act 2004. The code of practice on TKU gives trustees practical guidance on their functions and the standards of conduct and practice expected. In developing the code, we worked with the pensions industry to put together a list of items that trustees need to know and understand, together with a list of the documents containing policy with which trustees may need to be familiar. It is these lists that are known as the ‘scope of knowledge and understanding’ or ‘the scope guidance.’

Tailored learning paths

Based on the information that users provide when they complete the sign-up process, a tailored learning path is suggested for them. For example, trustees of defined contribution (DC) schemes do not really need to know all about the scheme specific funding regime and recovery plans. On the other hand, the vast majority of trustees of defined benefit (DB) schemes will have some sort of DC arrangement as well, and so should find useful learning material in the DC module.

Similarly, trustees of ‘small’ schemes, typically those with fewer than 100 members, may not find the material contained in these latest modules of relevance. Although they are at liberty to work through the modules, they will not necessarily form part of their recommended learning path.

A flexible learning experience

The material is presented using a variety of techniques to make the learning experience enjoyable but meaningful. Tutorials link to learning points in the scenarios, and case studies bring the learning to life further, by considering real examples where possible.

The programme is very flexible, to cater for different types of learner. A diagnostic tool at the start of every module gives the user an indication of how they might best access the learning on the site, depending on their level of experience. Experienced users, for example, are recommended to tackle the ‘Question Time’ section first – where they can test their knowledge of the subject in question – and then access the other learning if they need to. A new trustee, on the other hand, may find it more helpful to start at the very beginning, with the first scenario of the first module.

Blended learning

Although the programme works well as a standalone tool for trustees to tackle as individuals, we also envisage it being used as part of a programme by training providers, where trustee boards undertake group training. Its modular nature allows subjects to be studied in isolation, to fill the particular needs of a trustee board for refresher training, for example. The toolkit provides ready-made material, freely available, for discussion or to build on in order to generate training events tailored to the needs of specific scheme.

There will be one further module in the toolkit, following these latest two on investment issues. When learners have successfully worked through all the modules in their recommended path, including ‘Question time’, they will have the opportunity to obtain a certificate of successful completion.

Published: PMI News, March, 2007