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OPDU Report 24
- May 2008
The regulator’s free e-learning programme, the Trustee toolkit, was developed specifically to help trustees meet the Trustee Knowledge and Understanding (TKU) requirements. The code of practice on Trustee Knowledge and Understanding is now two years’ old. Terry Clayworth, head of the team behind the toolkit, reveals recent research showing how the toolkit is helping trustees in their day to day role. The Trustee toolkit, our free, interactive e learning programme for trustees, covers the whole scope of trustee knowledge and understanding. We published the first module in January 2006, and over the succeeding months developed and released further modules until the toolkit was complete in May 2007. So far, more than 23,000 users have signed up. The toolkit takes the user on a journey starting with election to a board of trustees and ending with tips on how to run your scheme effectively. Along the way the user will grapple with funding issues, evaluate the employer covenant and consider investment strategy. At one point it even looks as if the employer wishes to close the scheme, but in the event a rescue takes place. We know that the toolkit is popular, but can it really help trustees understand their obligations? During November 2007 to January 2008 we commissioned an independent research group to run focus groups and face to face interviews among lay trustees, who had some experience of the toolkit. The aim was to examine in depth the user experience of the toolkit and to assess how it was helping trustees understand their role and modify their behaviour. Most of the participants were trustees of medium to large DB schemes, who are required under the TKU regime to know the material covered by the whole toolkit. DC participants were either trustees of DC only schemes, subject to more limited TKU requirements and consequently a limited number of the toolkit modules, or of DB schemes with substantial DC benefits. The focus groups and interviews followed a process to assess the participants’ experience and under-standing of trusteeship, previous learning activities, assessment of the impact of the toolkit on their learning and change in ability to run their own scheme. Importantly this research was not just about self assessment of the difference the toolkit had made, but independent assessment of trustees’ learning by researchers experienced in pensions. Toolkit is a valuable resource The research confirmed our view that trustees found working through the toolkit did help them to under-stand the requirements of the TKU regime and was leading them to change their behaviour in positive ways. Most trustees reported that doing the toolkit made them more confident, and that they were applying what they had learnt from the toolkit to their own scheme, especially when there were significant decisions to be made, for example on scheme funding. Trustees giving feedback said: “It certainly affected the way we ran the discussion (in selecting new investment manager), and: “I thought I knew everything, but one of the useful things about the toolkit is I realised that there were large areas about which I knew nothing.” DB completers showed the highest levels of confidence about their role as trustees and their involvement in more technical discussions. They noted that having completed the toolkit they felt better able to:
DC completers of the toolkit:
These research results indicate that as toolkit use and training generally reach more and more trustees, standards of governance of both DC and DB schemes will continue to improve. How is the toolkit used? The research also investigated how trustees were using the toolkit. It discovered that the toolkit was being used not in isolation but in con-junction with other training, often on specific topics delivered by the scheme’s advisers. Trustees who used the toolkit in this way were shown to benefit more than those using it in isolation because of its emphasis on the ‘bigger picture’ put in a context of their employer covenant and other governance issues. These trustees also showed the greatest improvement in confidence and ability to solve the problems set in the research. Overall, users made good use of the flexibility of the toolkit, being able to dip in and out of it according to their time constraints. They also appreciated the ‘fun’ aspect of the programme – they engaged with the characters and the storyline which runs through the modules, and found that the use of interactive tools in some of the modules helped reinforce the learning. How did trustees rate the toolkit? The feedback was overwhelmingly positive. All said the toolkit was good or very good, except one who was neutral, and only one said they could not get on with e-learning. When invited to express their likes and dislikes about the toolkit, more than 85 per cent of comments made were positive, the rest revealed no serious concerns, and no one reported any reliability problems –all found it easy to use, appreciating its clarity. The toolkit was recognised as the one place where the TKU scope guidance was covered and users said that it being developed by the Pensions Regulator gave it a high level of credibility. One trustee commented: “I thought it was highly professional, better than I expected. I liked the multimedia aspect of it and being able to work at my own pace. I thought the case studies and the reference material were excellent.” A full report on the research done by iQ research will be available on our website in the Summer. Further help for trustees Running an ongoing scheme can be challenging enough for trustees, but sometimes they may find themselves having to wind-up the scheme and this process brings an added layer of complexity. As part of the joint DWP, regulator and PPF initiative to address the time taken to complete wind up, we have produced an additional suite of e-learning modules to help trustees in this situation.
All three can be accessed from the Trustee toolkit, although the subject areas are not part of the TKU scope covered by the main toolkit. The learning in these modules is presented in a different way, with the emphasis being on ‘just in time’ learning to help trustees move through each stage of the process smoothly. Sign up to the Trustee toolkit at: Terry Clayworth |
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