The Pensions Act 2004 (The Act) contained provisions about the new formal knowledge requirements for trustees of occupational schemes which came into effect on 6th April 2006. Existing & new trustees are expected to have gained knowledge by this date and will be given 6 months in which to get themselves up to speed. The guidelines issued in the Act are very general and it is the job of the Pensions Regulator to suggest Codes of Practice. Following the Codes of Practice is not mandatory, but if a dispute should arise, this will be taken in to account

• Understanding the special nature of a pension trust, including being familiar with their own schemes trust deed & rules and understanding duties, obligations and powers of a trustee
• Understanding pension scheme legislation and key provisions of related legislation affecting and impacting on pension schemes and trustee actions and activities
• Investments - being aware of the different types of assets and their characteristics
• The principles related to funding of defined benefit arrangements and the relationship with the employer to this
• The principles relating to funding of defined contribution schemes and the added risk this presents to members
• The level of contributions and the impact this has on funding for defined benefit schemes
• The principles of matching assets to liabilities within a defined benefit scheme
• Investment choices for defined contribution schemes (occupational) and AVCs
• Fund management & performance measurement for both defined benefit and defined contribution schemes
• Additional areas of knowledge are also required for Trustees of Defined Benefit Schemes

The Pensions Regulator will be adding questions to the Scheme Annual Return from 2007 which will require trustees to say how they have maintained their knowledge and understanding.

More information can be found on the website http://www.thepensionsregulator.gov.uk. In addition, 'The Trustee Toolkit' has been developed to help trustees (and anyone else who is interested in occupational pension schemes) meet the requirements for trustee knowledge and understanding, introduced by the Pensions Act 2004 (http://www.trusteetoolkit.com)