DWP consultation on trustee governance and administration

On 15 December 2025, the Department for Work and Pensions (DWP) published a consultation on trustee governance and administration which signals the Government’s intention to increase governance requirements for trustees and potentially bring in standards for administrators and TPR regulatory oversight. Read on for more details.

Good governance

Raising the bar

The consultation begins with a discussion on ‘raising the bar’ for KUS and driving up trustee standards generally with questions on what currently works well, barriers and the support trustees might require from 2030 onwards when the DC megafund requirements will kick in. 

Independent surveys carried out on the Pensions Regulator’s (TPR) behalf have shown that bigger schemes have higher governance standards, particularly on investment - there is therefore emphasis in the consultation on the additional skills and knowledge trustees should have in this area. 

DC megafunds

The Government reiterates its previous sentiment that smaller DC schemes should consolidate where their performance and governance “cannot match” that of the largest “and best” DC arrangements. 

The Government wishes to explore the potential conflicts in many commercial master trusts due to the lack of employer involvement and the scheme funder/ provider being part of the same commercial entity. Reference is made to current work in Australia in this area including current proposals to limit tenure periods, requirements for specific skills, conflict consideration and board performance review. The consultation asks whether any additional support or changes are needed for DC megafunds.

Professional and sole trustees and provision of services

The professional trustee market has expanded considerably in the last five years with the number of DC and DB schemes with a professional trustee rising from 39% in 2021 to 53% in 2025. The DB scheme professional trustee sector is also concentrated, with the 10 largest firms managing over 2,400 of the approximately 4,840 (as at 31 March 2025) PPF eligible DB schemes, with total assets over £1tn. Of 18 firms recently surveyed, only five provided just core trustee services, the remainder also providing other services such as in-house administration.

Although there are advantages to having a professional trustee, there are also risks including conflicts relating to both the provision of in-house services and selecting and managing service providers. The consultation queries whether additional safeguards are needed for effective risk management. 

Multiple schemes

There is discussion around the difficulties (e.g. capacity) and benefits (e.g. sharing good practice and drawing on support from other staff) of trustees being appointed to multiple boards. The Government is considering whether there should be restrictions such as on the number of trustee appointments that can be held. 

Professional corporate sole trustees (PCSTs)

The increase in professional trustees has been particularly marked for PCSTs. Conflict risks are heightened because of decision-making being with fewer people. There are also checks and balances, and diversity risks. Having said that, the consultation does note that PCST “arrangements can make a valuable contribution to scheme governance particularly in schemes where particular skills and/ or a more streamlined decision-making approach would be beneficial, for example DB schemes heading towards buy out or DC schemes winding up”. 

Consultation questions on PCSTs include whether there should be any limitations, suitability guidelines and what an enhanced sole trustee code of practice might include.

Trustee appointment

Appointment and replacement

After discussing the different trustee appointment methods, the possibility of conflicts and concerns of favouring the employer, the consultation touches upon the importance of having a diverse and inclusive trustee board with a wide range of skills and understanding whilst noting that trustees are less diverse than the general population.

The consultation asks whether additional controls/ safeguards are needed, how government and regulators can help with diverse and talented recruitment and whether there should be restrictions on appointment length or repeat appointments.

A public (independent) trustee

The Government wishes to explore using a government-appointed public trustee as an alternative to the appointment of a professional trustee from TPR’s independent trustee register, the circumstances in which such an appointment might be made and whether, and how, TPR’s current powers to suspend, prohibit or replace a trustee should be amended.

Trustee directory

The previously announced plans for TPR to have a directory of trustees are ongoing. The Government wishes for this directory to be set up in an administratively efficient way that will not create unnecessary additional burden.

Skills and knowledge

Accreditation for professional trustees

The Government is considering what extra requirements there should be for professional trustees and the appropriate KU requirements which should include not just technical KU but also skills such as leadership and investment management. It suggests imposing higher statutory standards rather than the current self-regulated system of accreditation. Questions on this area include what skills and areas should be covered and the appropriateness of setting higher statutory standards. 

Support for lay trustees

This section covers how lay trustees can be better supported and what benefits, skills and support/ CPD such trustees should have as well as asking whether lay trustees should be accredited.

Member voice

Although most trust-based schemes must have member-nominated trustees, having large DC master trusts, PCST appointments and few open DB schemes means that consideration needs to be given to how member views can be effectively represented.

Administration

Because of gaps in regulatory oversight of administrators whereby FCA regulated businesses that provide administration services are regulated by the FCA, but others are not, the Government is contemplating introducing mandatory minimum standards for administrators and/ or wider services such as Integrated Service Providers. It is also considering how TPR might regulate administrators, whether there should be mandatory registration with TPR and the risks associated with DC consolidation.