What policies are required?

There are a range of policies we believe a well-run fund should have in place, covering funding, investments, administration and governance. A number of these will be required as a result of an explicit regulatory requirement (denoted by bold text in the table below). Many others, however, enable administering authorities to demonstrate effective systems of internal controls or reflect current ‘best practice’. The table below sets out the various policies we believe well-run funds should have in place or consider implementing.

Investment policies and internal administration procedure policies will be required in addition to those above.

What action should administering authorities be taking?

As we set out in our recent 60 Second Summary we are encouraging funds to adopt a slimmed down version of the Funding Strategy Statement (FSS) as part of the 2022 valuation exercise in England & Wales. This slimmed down document is then supported with a number of short satellite policies associated with scheme funding, ensuring the FSS and the supporting policies are more relevant and easily accessible.

This principle can also extend to all other fund policies. As you’re already considering the FSS and funding policies, now might be an ideal time to consider all the other policies referenced in the above table. This should include:

• Policy review – have you got the right policies in place?  Are there any key ones missing that need to be considered?  For those you do have, when were they last reviewed? 
• Accessibility – this can cover the use of plain English, as well as ensuring policies are readily available on your Fund’s website.
• Your committee’s involvement – Has your committee been involved in viewing and signing off these policies? Are they aware of the policies which the Fund has in place? If not, then a training session to cover these policies, their purpose, and implications might be beneficial.
• Create a policy log – with the ever-increasing focus on governance, having a policy log in place is a useful way to keep track of the policies you have and any planned review dates.      

Conclusions

The continued focus on governance and risk management does not show any sign of slowing down. Having up-to-date policies in place that are accessible and relevant should be part of your risk management strategy. Now might be the ideal time to review existing policies or compliment those already in place. 

If you would like to discuss how we might be able to help you to review existing policies, or provide templates or our policies toolkit and checklist, please contact your usual Hymans Robertson consultant or get in touch here.