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Pension board
Knowledge and understanding framework

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1. Legislative requirements

In accordance with the Pensions Act 2004, every individual who is a member of a pension board must be conversant with:

1.1

  • the rules of the Local Government Pension Scheme (LGPS) , in other words the rsegulations and other regulations governing the LGPS (including the Transitional Regulations, earlier regulations and the Investment Regulations); and
  • any document recording policy about the administration of the Fund which is for the time being adopted in relation to the Fund,

1.2 Board members should also have knowledge and understanding of:

  • the law relating to pensions; and
  • such other matters as may be prescribed.

1.3 Board members' legal responsibilities begin from the day they take up their role and therefore they should immediately start to familiarise themselves with the documents as referred to in Appendix A and the law relating to pensions.

1.4 Board members must ensure they have the appropriate degree of knowledge and understanding to enable them to properly exercise their functions as a member of the board.

1.5 Board members are required to be able to demonstrate their knowledge and understanding and to refresh and keep their knowledge up to date. Board members should maintain a written record of relevant training and development.

1.6 The Scheme Manager is required to maintan and develop the framework.

2. Degree of knowledge and understanding

2.1 Being conversant with the rules of the LGPS and any documents recording policy about the administration of the Fund means having a working knowledge so they can be used effectively when carrying out their role of assisting the administering authority.

2.2 Board members should understand the rules and documents in enough detail to know where they are relevant to an issue and where a particular provision or policy may apply. Details of West Yorkshire Pension Fund’s (WYPF) policies etc. can be found at Appendix A

2.3 The rules of the LPGS include the LGPS Regulations, Investment Regulations, Transitional Regulations (including earlier regulations as defined in the Transitional regulations) to the extent they remain applicable and any statutory guidance referred to in the regulations.

2.4 To ensure knowledge and understanding of the pension board is maintained 50% of the board will be appointed on a two year rolling basis. Any member replaced before the expiry of their normal term will serve for the remainder of that term only, when they will be eligible to service for further full terms in accordance with the Terms of Reference.

3. Induction training

As part of the induction training, board members are required to undertake the Pensions Regulator’s online toolkit training. This training will enable board members to meet the minimum level of knowledge and understanding introduced in the Pensions Act 2004

The toolkit included nine Essential Learning for Trustee compulsory modules and seven Public Sector toolkit compulsory learning modules.

The nine Essential Learning for Trustees compulsory models test Pension Board member knowledge in the following areas:

  • Introducing pension schemes
  • The trustee’s role
  • Running a scheme
  • An introduction to investment
  • How a defined benefit scheme works
  • Funding your defined benefit scheme
  • Defined benefit recovery plans. Contributions and funding principles
  • Investment in a defined benefit scheme

The seven Public Sector Toolkit compulsory modules test Pension Board member knowledge in the following key areas:

  • Conflicts of Interest
  • Managing Risk and internal controls
  • Maintaining accurate member data
  • Maintaining member contributions
  • Providing information to members and others
  • Resolving internal disputes
  • Reporting breaches of the law

The Pensions Regulators website is: www.thepensionsregulator.gov.uk/public-service-schemes.aspx

4. Training

4.1 Board members are expected to attend regular training events.

4.2 In addition to the Pensions Regulator Toolkit. Pension Board members will be invited to undertake training and development as detailed in the CIPFA Knowledge and Skills framework.

4.3 Training will be delivered through a variety of methods including:

  • in-house training days provided by officers and/or external providers
  • training as part of meetings provided by officers and/or external advisers
  • external training events
  • circulation of reading material
  • attendance at seminars and conferences offered by industry- wide bodies, and
  • links to on-line training

5. CIPFA Knowledge and Skills Framework

5.1 In an attempt to determine the right skill set involved in decision making CIPFA has developed a technical knowledge and skills framework

5.2 In total there are six areas of knowledge and skills identified as the core technical requirements for those working in public sector pensions These are:

  • Pensions legislative and governance context
  • Pensions accounting and auditing standards
  • Financial services procurement and relationship management
  • Investment performance and risk management
  • Financial markets and products knowledge
  • Actuarial methods, standards and practices.

5.3 Training Needs Analysis can be used to help assist Board members and the scheme managers to identify areas of the CPIFA Knowledge and understanding framework where training is required.

Appendix A

You must have a working knowledge of the following policies:

Member and employer information Location
Member booklets, announcements and other key member and employer communications, which describe the Fund’s policies and procedure, including AVC guides). www.wypf.org.uk
Relevant policies Location
Conflicts of Interest Policy Conflict of interest page
Internal Dispute Resolution Procedure Publications/Booklets index
Reporting of Breaches Procedure Reporting breaches of procedure page
WYPF policy statements Location
Investment Strategy Statement www.wypf.org.uk/Member/Publications/policyStatements
Funding Strategy Statement  
Pensions Administration Strategy  
Communication Policy  
Governance Compliance Statement  
WYPF Discretionary Policy Statement Supplied on request
Others Location
Actuarial Valuation Report and Rates and Adjustment Certificate www.wypf.org.uk/Member/publications/Valuation
WYPF Risk Register Supplied on requst
Annual Report and Accounts www.wypf.org.uk/Member/Publications/ReportAndAccounts
Investment management and activity www.wypf.org.uk/Member/Investments

August 2017