General code in force: 28 March 2024
This module forms part of our expectations for trustees of those schemes required to operate an effective system of governance, see Systems of governance.
- This module is for those schemes with more than 100 members that are required to operate an effective system of governance, see Systems of governance. There are some exceptions1. Other schemes may wish to adopt these principles as good practice.
- A remuneration policy sets out the basis and means for paying those undertaking activities in relation to the scheme that are paid for by the governing body.
- Relevant governing bodies should establish a remuneration policy and keep a written record of it. This policy should:
- be in proportion to the size, scale, nature, and complexity of scheme activities
- support the sound, prudent, and effective management of the scheme
- be aligned with the scheme’s long-term interests and help assess the value of the remunerated services
- set out the principles for determining pay and the decision-making process for payment levels
- cover all persons or corporate bodies including service providers, who effectively run the scheme, those who carry out key functions, or whose activities materially impact the scheme’s risk profile
- include measures to mitigate potential conflicts of interest and focus on ‘in-house’ roles, such as trustees, trustee secretary, administrators, and subcommittees
- be reviewed at least every three years, but in most cases, it will be appropriate to do so annually, or immediately following any significant changes to the scheme’s governance arrangements
- include an explanation of the decision-making process for the levels of remuneration, and why these are considered appropriate
Glossary and legal reference
Risk profile
Includes consideration of the scheme’s membership demographics, funding, asset allocation, and sponsor covenant (where applicable).
1 Section 249A (3) Pensions Act 2004 [Article 226A (3) Pensions (Northern Ireland) Order 2005]