Constitution and structure of the Plan
The Pearson Pension Plan (the Plan) is administered in accordance with the Rules in the interests of its beneficiaries by a Trustee Company, Pearson Pension Trustee Limited (the Trustee). Responsibility for day to day management of the Plan is delegated to the Pensions Director, who is an employee of Pearson Pension Trustee Services Limited.
The Plan is organised into sections, each with its own benefit structure. From 1 December 2006, all sections were closed to new entrants with the exception of the Money Purchase 2003 (MP03) Section. On 1 September 2013 the Auto Enrolment (AE) Section was introduced to meet the minimum legislative requirements for eligible jobholders who meet the AE criteria and do not wish to join the MP03 Section of the Plan. In addition, the rules also allow non-eligible jobholders and entitled workers to opt in to the AE Section.
The principal employer under the Plan, Pearson Services Limited (PSL) has the power to appoint and remove the Trustee but only with the consent of the Trustee. PSL has the right to appoint three “A” Directors and to remove and replace them. A further three “A” Directors are nominated by members in accordance with the Plan’s member nominated trustee procedures.
The “B” Directors have the right to appoint three “B” Directors and to remove and replace them. The B Directors, who are not current Pearson employees and are appointed with no fixed time limit, have special voting rights and special decision making powers. If any proposals are made which they believe are not in members’ best interest, they may by unanimous decision require the Plan to be wound up.
Boards and Committees
The members of the Investment Committee are appointed by the Trustee. The Investment committee reviews the investment performance of the fund managers on a regular basis, monitors the compliance of the fund managers with the relevant guidelines and makes recommendations to the Trustee on investment matters.
Pearson Pension Property Fund Limited (the Property Trustee)
The Property Trustee’s responsibilities include investing the funds contained in the Property Fund, monitoring infrastructure investments made by the Plan and appointing and removing the property fund managers and reporting to the Plan Trustee, which is the sole beneficiary of the Property Fund.
Audit and Risk Committee
The members of the Audit and Risk Committee are appointed by the Trustee. The Audit and Risk Committee reviews the accounting, financial reporting, internal control and risk management processes of the Plan and the audit of its financial statements.
Death Benefits Committee
The Death Benefits Committee reviews death benefit cases and approves discretionary benefit payments to a dependant.
Internal Dispute Resolution Committee
The Internal Dispute Resolution Committee reviews member complaints under the Plan’s Internal Dispute Resolution Procedure
The Rules Committee reviews changes in legislation which may impact on the Plan and any rule amendments required.
The Remuneration Committee determines the level of fees payable to Trustee Directors and external members of the Trustee’s committees
In addition to the committees described above, the Trustee has established a number of working parties to focus on particular subject areas.
The Company secretary is Stephen Beaven, who is also the Pensions Director and head of the pensions team.
Advisers to the Trustee
These consist of professional advisers such as solicitors, actuaries, auditors and investment consultants who will arm the Trustee board with professional advice to help them make informed decisions.
The pensions team
The Trustee delegates its daily administration duties to a dedicated pensions team headed by Stephen Beaven, the Pensions Director. To contact the pensions team please go to the ‘Contact us’ page.
The Trustee considers that good governance is essential to the management of the Plan and has established a framework to ensure standards of governance receive appropriate attention and that changes are addressed.
As part of its governance framework, the Trustee produces an annual action plan, which it reviews with its professional advisers to ensure the Plan continues to be managed in accordance with its rules, legal requirements and appropriate internal controls.
The Trustee maintains a Risk Register and Assurance Plan to identify the key risks which may affect the Plan and the controls implemented to mitigate them. This document is monitored and reviewed on a regular basis to ensure compliance with the Code of Practice on Internal Controls and the guidance notes, issued by the Pensions Regulator.
These governance documents enable the Trustee to monitor the arrangements, procedures and systems in place for the management of the Plan and the security of its assets. They also provide the basis for regular review and assessment.
The Pensions Regulator published the DC Code and DC Regulatory Guidance in 2016, and the Trustee has assessed whether or not it meets all of the requirements. Each DC workplace pension scheme is required to publish a Defined Contribution Governance Statement, which is included in the Plan’s Report and Financial Statements.
The good governance of the Plan is monitored by the Plan’s Audit and Risk Committee which also considers the work undertaken and any recommendations made by both Pearson plc’s internal audit department and by the Plan’s statutory auditor, Crowe U.K. LLP.