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Employer  >  Trustee Zone  >  OPS Matters  >  TPR papers on dispute resolution and conflicts of interest published

TPR papers on dispute resolution and conflicts of interest published

Dispute Resolution

These proposals stem back to the Regulator’s consultation document, Dispute resolution - reasonable periods, issued on 25 October 2007. The consultation closed on 19 December 2007.

What’s new?

The Regulator published its consultation response on 22 February 2008 which looked at 2 main issues. Firstly, simplifying the original 2 stage decision making process, which came about as a result of the Pensions Act 1995, to a single stage process. It would be up to trustees to adopt the single stage process however, if there were no obvious issues with the current procedures, those could carry on without the need for change.

Secondly, the time limit in which trustees must reply to disputes has been redefined. The current reporting time limit was seen as inflexible so any decisions must be made within a 'reasonable period'. The proposal is that this will be set as 4 calendar months from the date the complaint is made. In addition, the complainant must be notified within 15 working days of any decision.

The Regulator did make the point that the reasonable period is not a target timescale and decisions may well be reached sooner.

The next step

These are all just proposals at this stage but are unlikely to change. Once the full details are known we’ll let you know.   

Conflicts of interest

The Regulator highlighted in its July 2007 governance report that when compared with 2006, there had been an increase in the proportion of schemes that had set up processes to manage conflicts of interest. But the Regulator also acknowledged that there was a gap in guidance.

The Regulator has now published a further consultation document aimed at occupational pension scheme trustees which looks at the adequacy of their governance procedures to manage conflicts - for example, where a personal interest exists.

The key principles…

…covered in the consultation are :

• understanding the importance of conflicts of interest
  
• having a conflicts of interest policy in place
  
• identifying conflicts of interest
  
• evaluation, management or avoidance of conflicts and
  
• managing adviser conflicts.
  
  

Chief executive of TPR, Tony Hobman commented, “We recognise that many conflicts are inherent by their very nature. The key is managing conflicts appropriately, and to do this there must be a culture of openness. In some circumstances where there are acute conflicts these may need to be avoided entirely. Trustees should regularly assess policies and procedures they have in place to make sure they are well prepared to identify and handle conflicts as they arise."

We’ll be in touch

The consultation runs until 30 May 2008 so once the Regulator has published its findings, we’ll let you know.