Have you considered the key role a pension governance committee plays in ensuring you're getting good value from your pension spend? Or, the role a governance committee plays in helping your employees achieve a great outcome in retirement?

Good pension governance should not be a tick-box exercise. It's critical to the effective running of your pension arrangement, and can make a huge difference to you and your employees.

Here are my five reasons why you need to establish a pension governance committee and the important role the committee plays.

1. Ensure you obtain value from your pension spend.
   You may have outsourced your provision to a GPP or a master trust, but you will still have to pay a lot of money into the pension arrangement through contributions. How will you ensure that you obtain value for this, and that the pricing your members receive will be regularly under review? This is one of the key roles of your governance committee.
2. Ensure your corporate objectives for pension provision are met.
   So, you've outsourced your provision, but you still have objectives around pension provision that are probably related to your wider wellbeing or reward packages and strategy. Who will ensure the integration with your wider reward policies and that your corporate objectives around pensions are met? Again, this is the job of your governance committee.
3. Support your members in achieving good outcomes in retirement.
   More and more people are reaching retirement with DC benefits only, which is an adequacy crisis waiting to happen in the UK. If you don't understand what you are working towards, then DC outcomes are harder to achieve than more traditional DB benefit where this is defined for you and doesn't involve as much consideration. So, if you want your members and employees to have great outcomes in retirement, you need somebody actively working to support that aim, which is another key role for your governance committee.
4. Ensure your members are considered as a distinct group.
   If you have outsourced your provision, you will be part of a larger arrangement or system of pension provision. Many different employers will also partake in similar arrangements or in the same arrangement if it’s a master trust. Who will look after your members and employees as a distinct group with their specific characteristics taken into account? This won't be the IGC or the master trust trustees because they have many different sections and schemes to oversee. That's why you need your governance committee to really focus in on your own particular membership.
5. Ensure consistency with your corporate policies.
   This is becoming increasingly important, for example corporate policy on sustainability, diversity and inclusion, and all manner of things. To achieve good corporate governance, these policies need to be embedded into everything you do and particularly in your pension scheme where issues are quite exposed. You can also make a key difference through sustainable, responsible investment and carefully selecting where pension scheme assets are invested. There's a lot that can be done in this area and this is something your governance committee can do for you.

In a nutshell, all of this can be achieved through your Governance Committee, and although it's not a legal requirement, focusing on these key measures can make a huge difference to you and your employees.

If you have any questions about setting up a governance committee, or would like to discuss your current governance arrangements, please get in touch.