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Standard Life Master Trust Co. Ltd

AAF 02/07 Assurance ReportGovernance control procedures for the Standard Life Master Trusts

Report for the year ended 31 December 2018

2AAF 02/07 Assurance Report

Contents

1 Introduction 3

2 About the Board 6

3 Report of the Board of Standard Life Master Trust Co. Ltd 8

4 Report by reporting accountant 10

5 Control Objectives and Procedures 13

5.1 VALUE FOR MEMBERS 14

5.1.1 Assessing value for members 145.1.2 Management of Costs & Charges 15

5.2 INVESTMENT GOVERNANCE 17

5.2.1 Protection of Assets 17

5.3 THE TRUSTEE BOARD 23

5.4 SCHEME MANAGEMENT 24

5.5 ADMINISTRATION 31

5.5.1 Core Financial Transactions 315.5.2 Business and Disaster Recovery 365.5.3 Data Quality and Security 40

5.6 COMMUNICATION AND REPORTING 46

5.6.1 Communications and Reporting 46

Appendix – Letter of Engagement 50

1.Introduction


The Board of Standard Life Master Trust Co. Ltd (SLMTC) is pleased to present its report detailing the governance control procedures, established by the Board, that are in place relating to the Standard Life DC Master Trust and Stanplan A (the “Master Trusts”).

The Board has adopted the framework provided by the Audit and Assurance faculty of the Institute of Chartered Accountants in England and Wales entitled Assurance Reporting On Master Trusts (Master Trust Supplement to ICAEW AAF 02/07), referred to hereafter as “The Master Trust Supplement to AAF 02/07”.

This assurance report provides a description of the governance control procedures established by the Board of SLMTC in relation to the Master Trusts throughout the period from 1 January 2018 to 31 December 2018 and a report on the suitability of the description, design and operating effectiveness of those governance control procedures.

Significant events during the year.

Phoenix Transition On 23 February 2018 Standard Life Aberdeen Plc announced its intention to significantly enhance its existing long term strategic partnership with Phoenix Group Holdings with the sale of the majority of Standard Life Assurance Ltd. The acquisition was formally completed with effect from 31 August 2018.

What does this mean for members? There have been no changes to the Master Trust proposition as a result of the sale of Standard Life Assurance Ltd to Phoenix Group Holdings. The Master Trust schemes remain an integral part of the Pensions and Savings business which remains part of Standard Life Assurance Ltd.

As there have been no changes to the Master Trust proposition with the sale of Standard Life Assurance Ltd to Phoenix Group Holdings management reporting of investment related information and administration to SLMTC remains effectively unchanged.

As a consequence there have been no material changes to relevant control procedures.

Master Trust Authorisation The Pension Schemes Act 2017 stipulates that Master Trust schemes must be authorised by the Pensions Regulator. Any scheme which doesn’t achieve authorisation will be forced to wind up and transfer their assets to an authorised scheme.

The Board submitted a draft application as part of the Pensions Regulators ‘Readiness Review’ in May 2018. The ‘Readiness Review’ allowed the Board to gauge the level of detail required in responses to questions along with the extent of evidence needed.

Feedback, from the Pensions Regulator, on the draft application was received in July 2018. The Board and Standard Life believe that participating in the ‘Readiness Review’ and receiving the feedback helped to shape the content included in the final application.

The final application was submitted in early 2019, well within the Pensions Regulators application window. We will continue to work with TPR through the process and are confident both schemes will be authorised.


Standard Life Master Trust Co. Ltd Structure

PTL (Chair)Richard Butcher

Director

Francois BarkerDirector

Standard Life DC Master Trust

Stella GirvinDirector

Master Trust Schemes

Poisson Management Ltd

René PoissonDirector

Stanplan A

Standard Life (Representatives

as required)

Ruston Smith Director

Standard Life Master Trust Co. Ltd (SLMTC)*

*Standard Life Master Trust Co. Ltd is a subsidiary of Standard Life Assurance Limited

2.About the Board


About the BoardThe trustee company (SLMTC), effective from April 2015, is managed by five independent directors. PTL Governance Limited (PTL) has been appointed as a director of SLMTC and chair of the Board of directors. Pension secretarial services are provided to the Trustee by PTL. Standard Life provide company secretarial services to the SLMTC.

PTL is a specialist and award winning Independent Pensions Trustee company. Its team delivers expert pensions governance advice to businesses across the UK.

Richard Butcher is Managing Director of PTL. Richard joined PTL in 2008 and he became Managing Director in 2010. Richard has been involved in pension scheme governance since 1985. PTL have been appointed chair of Standard Life’s Master Trust board, and Richard acts as their representative. Richard is a Fellow of the Pensions Management Institute (PMI) and until 2017 sat on their council. He is non-executive chair of the Pensions and Lifetime Savings Association (PLSA).

Francois Barker is a partner and Head of Pensions at Eversheds Sutherland (International) LLP, where he leads pension advisory client work and the strategic development of the pensions practice. He has been involved in the pensions industry since 1997, working with trustees and employers on the full range of pensions issues. He is actively involved in the development of pension’s law, policy and strategy. Francois has been a member of the CBI’s Pensions Panel since 2000 and is an elected member of the PLSA’s DC Policy Committee.

Stella Girvin has worked in the pensions industry since 1982, covering a range of DB and DC schemes, both at a consultancy and in-house at Travis Perkins plc until January 2015. She is also a Chartered Company Secretary, with a particular focus on corporate governance and compliance matters. Stella is Chair of the two Travis Perkins Group DB schemes and a Client Director for Capital Cranfield Trustees through which she holds a number of other DB and DC Trustee appointments.

René Poisson retired in September 2012 after a 30 year career with JP Morgan, latterly as Managing Director and Senior Credit Officer for EMEA. He has a number of non-executive appointments including as an Independent Director and Chair of the Remuneration Committee of the Universities Superannuation Scheme (USS), Chair of the JP Morgan UK Pension Plan and its Investment Committee, immediate past Chair of the Standard Life Independent Governance Committee, Director of the Standard Life Master Trust, Chair of the Advisory Committee of Five Arrows Credit Solutions and Five Arrows Direct Lending.

Ruston Smith has over 30 years’ experience in the pension and investment industry. He is the former Group Pensions and Insurable Risk Director for Tesco where, as CEO, he had responsibility for Tesco Pension Investment, the FCA approved in house investment company that manages the £14bn of UK assets. He is the non-executive Chairman of Tesco Pension Investment, Tesco’s DB Trustee Board, Tesco’s DC Governance Committee and holds other Trustee positions including with BAE Systems Pension Scheme. He’s the Chair of PTL Ltd, a, a NED of Smart Pension Limited, JP Morgan Asset Management International Limited and some of its subsidiaries, a Governor of the Pensions Policy Institute and Chairman of GroceryAid. He was a co-chair of the DWP’s Automatic Enrolment Review Advisory Board and is a past Chairman of the Pensions and Lifetime Savings Association. He is also a former company secretary of a FTSE 250, has an MBA, a Fellow of the Pensions Management Institute and the Institute of Management.

3. Report of the Board of Standard Life Master Trust Co. Ltd


Report of the Board of Standard Life Master Trust Co. LtdAs the Board of SLMTC, we are responsible for the identification of control objectives relating to the governance of the Master Trusts and for establishing governance control procedures that provide reasonable assurance that the control objectives are achieved. Those control objectives are derived from standards of governance set out in the Pensions Regulator’s DC code of practice and DC guides.

In carrying out those responsibilities, we have regard not only to the interest of the members of the Master Trusts and employers (who have entrusted their employees’ DC contributions to the Master Trusts, or are considering doing so), but also to the needs of the trust business and the general effectiveness and efficiency of the relevant operations.

We have evaluated the effectiveness of the Master Trusts’ governance control procedures having regard to ICAEW’s Technical Release AAF 02/07 including its Master Trust Supplement and the control objectives set out therein. For the purposes of this assurance reporting exercise, Control Objective 20 – The objective around ‘New business take-ons are properly established in accordance with Master Trust’s rules and contractual arrangements’, is not relevant to Stanplan A and so has not been included, as Stanplan A is closed and no new schemes into Standard Life can be accepted into it.

We set out in section 5 of this report a description of the relevant governance control procedures established by the Board of SLMTC together with the related control objectives which operated during the period from 1 January 2018 to 31 December 2018 to confirm that:

(a) the report describes fairly the governance control procedures established by the Board of SLMTC that relate to the control objectives referred to above which were in place throughout the period from 1 January 2018 to 31 December 2018;

(b) the governance control procedures described were suitably designed throughout the period from 1 January 2018 to 31 December 2018 such that there is reasonable assurance that the specified control objectives would be achieved if the described governance control procedures were complied with satisfactorily; and

(c) the governance control procedures described were operating with sufficient effectiveness to provide reasonable assurance that the relevant control objectives were achieved throughout the period from 1 January 2018 to 31 December 2018.

Trustee

Date: 10 June 2019

Signed on behalf of the Board of SLMTC

4.Report by reporting accountant


Report by reporting accountantIndependent reporting accountant’s assurance report on governance control procedures established by the trustees of Master Trusts

To the Trustee of Stanplan A and the Standard Life DC Master Trust.

Use of reportOur report, subject to the permitted disclosures set out below, is made solely for the use of the Trustee of Stanplan A and the Standard Life DC Master Trust (“the Trustee”) and solely for the purpose of reporting on the governance control procedures established by the Trustee, in accordance with the terms of our engagement letter dated 17 September 2018 attached in the Appendix.

Our work has been undertaken so that we might report to the Trustee those matters that we have agreed to state to it in our report and for no other purpose.

We permit the disclosure of our report, in full only, to verify to the recipient that a report by reporting accountants has been commissioned by the Trustee and issued in connection with the governance control procedures established by the Trustee without assuming or accepting any responsibility or liability to the recipient on our part.

To the fullest extent permitted by law, we do not and will not accept or assume responsibility to anyone other than the Trustee as a body for our work, for our report or the opinions we have formed.

ScopeWe have been engaged to report on the description of governance control procedures established by the Trustee throughout the period from 1 January 2018 to 31 December 2018 and on the suitability of the design and operating effectiveness of those governance control procedures stated in the description.

Trustees’ responsibilitiesThe Trustee’s responsibilities and statements are set out in section 3 of the Trustee’s report. The control objectives stated in the description include those control objectives set out in the Master Trust Supplement to AAF 02/07 that are considered relevant by the Trustee.

Our responsibilitiesOur responsibility is to form an independent opinion, based on the work carried out in relation to the governance control procedures established by the Trustee as described in section 5 of the Trustee’s report and report this to the Trustee. We conducted our engagement in accordance with International Standard on Assurance Engagements (ISAE) 3000 and with ICAEW Technical Release AAF 02/07 including its Master Trust Supplement. ISAE 3000 and AAF 02/07 require, among other things, that we comply with ethical and other professional requirements.

We planned and performed our procedures to obtain reasonable assurance about whether, in all material respects, the description of the governance control procedures is fairly presented and they were suitably designed and were operating effectively. The criteria against which the governance control procedures were evaluated are the control objectives developed for Master Trusts as set out within the Master Trust Supplement to AAF 02/07 and identified by the Trustee as control objectives to be applied for the purpose of governance.

We draw your attention to the disapplication of control objective 20 in respect of Stanplan A, as explained in the ‘Report of the Board of Standard Life Master Trust Co. Ltd’ in section 3 of the Trustee’s report.


Our work involved performing procedures to obtain evidence about the presentation of the Trustee’s description of the governance control procedures and the design and operating effectiveness of those governance control procedures. Our procedures included assessing the risks that the description is not fairly presented, and that the governance control procedures were not suitably designed or operating effectively. Our procedures also included testing the operating effectiveness of those governance control procedures that we considered necessary to obtain reasonable assurance that the control objectives stated in the control description were achieved. An assurance engagement of this type also included evaluating the overall presentation of the description and the suitability of the control objectives stated therein.

Our independence and quality controlWe have complied with the independence and other ethical requirements of the ‘Code of Ethics for Professional Accountants’ issued by the International Ethics Standards Board for Accountants which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

The firm applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control, including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Inherent limitationsThe Trustee’s description of governance control procedures was prepared to meet the common needs of a broad range of users and may not, therefore, include every aspect of the governance control procedures that may be relevant to each employer company or member of Stanplan A of the Standard Life DC Master Trust. Also, because of their nature, governance control procedures may not prevent or detect and correct all errors or omissions in performing governance or administration activities.

Our opinion is based on historical information. The projection of any evaluation of the fairness of the presentation of the description, or opinion about the suitability of the design or operating effectiveness of the control procedures to future periods would be inappropriate.

OpinionIn our opinion, in all material respects:

i. section 5 of the Trustee’s report fairly presents the governance control procedures established by the Trustee that relate to the control objectives referred to above which were in place throughout the period from 1 January 2018 to 31 December 2018;

ii. the governance control procedures established by the Trustee described in section 5 of the Trustee’s report were suitably designed to provide reasonable, but not absolute, assurance that the specified control objectives would have been achieved if the described governance control procedures operated effectively throughout the period from 1 January 2018 to 31 December 2018; and

iii. the governance control procedures established by the Trustee that were tested were operating with sufficient effectiveness to provide reasonable, but not absolute, assurance that the related control objectives were achieved the throughout the period from 1 January 2018 to 31 December 2018.

Crowe U.K. LLP Chartered accountants London

Date: 12 June 2019

5. Control objectives and procedures

5.Control Objectives and Procedures


Each year SLAL produce a Pensions Internal Control Statement (PICS) which addresses a number of key administration and IT controls. As part of the Board (the Trustee Board) oversight and monitoring of the controls environment for activities undertaken by SLAL, an annual review of the PICS is undertaken by the Board to complement other control procedures established by the Board, particularly in relation to administration and IT.

The 2018 PICS published by SLAL in March 2019 addresses controls maintained in the year ended 31 December 2018. Upon receipt, the Board reviewed the 2018 PICS and whilst this review was subsequent to the reporting period of this Master Trust assurance report, this monitoring and oversight control forms a key aspect of the controls environment for relevant controls objectives referred to throughout section 5.

5.1 VALUE FOR MEMBERS

5.1.1 Assessing value for members

1. A value for money assessment is undertaken annually and the process followed is documented and approved. The assessment should include value to members derived from scheme management and governance, administration, investment governance and communications.

Process/activityEach year the Board carry out a Good Value assessment. The outcome of the assessment is reported in the Chair’s Annual Statement within seven months of the Master Trusts’ year ends.

The Good Value assessment considers the costs and charges deducted from members’ funds and compares them against the benefits delivered to members. The benefits, in this context, include certain prescribed items (for example, the timeliness and accuracy of core financial transaction processing) and other items considered by the Board to be of value to the members.

The process of the review is recorded in the minutes of Board meetings. The Board have formally discussed good value and what it may mean for the Master Trusts. Discussions will continue to ensure that good value and what it means for members of the Master Trusts can be incorporated into the Chair’s Annual Statement. Any formal discussions between the Board and SLAL, in this context, are recorded in meeting minutes and/or by letter or email. The outcome of the assessment is documented in the Chair’s Annual Statement. The Chair’s Annual Statement is approved by the Board before publication.

Control procedures Crowe test description

The Board carry out a Good Value assessment in accordance with the Scheme Calendar. The review of the assessment is recorded in the minutes of Board meetings.

Any actions for the Board are recorded in subsequent minutes and matters arising reports.

We obtained and inspected the Good Value assessment, Scheme Calendar and minutes and confirmed that the Board had reviewed the Good Value assessment, as evidence of the stated procedure being followed.

No exceptions noted.

There were no actions arising from the review to be recorded in subsequent minutes or detailed in the matters arising report.



5.1.2 Management of Costs & Charges

2. Disclosure of information to members of costs and charges (rates (%) and/or amounts (£)) are complete and accurate.

Process/activityAll of SLAL’s Annual Statements adhere to Financial Conduct Authority (FCA) Conduct of Business 16.3 (COBS) rules around periodic reporting. SLAL’s Calculations Compliance (Proposition Operations) area meet regularly with the FCA to ensure the latest set of rules/controls are being met. Annual Statements are issued on a minimum annual basis, but can be requested by the member at any stage on an ad-hoc basis.

SLAL’s Document Development Services (DDS) team are responsible for ensuring this information is presented to members in a fair, easy to understand and consistent manner. All DDS Document Specifications require full sign-off by Legal, Compliance and business representatives before development can commence. All developments are rigorously tested prior to implementation into production to ensure it matches the signed-off document specification.

Charges can be detailed by Standard Life Assurance Ltd. (SLAL) in either rate (%) or monetary (£) amounts. Generally if the charge is variable or measured against units, these are shown in % format; however, the newly developed Annual Benefits Statement shows both the rate and monetary amount. The new Annual Benefits Statements were issued for the first time in 2018 for Standard Life DC Master Trust clients; further analysis is required to determine when the new statements could be made available to members with older-style plans including Stanplan A.

The formats in which the charges are shown are in line with standards set out by the Pensions Regulator and the FCA.

All post sale documentation (e.g. fund guides, access to tools which disclose information relating to costs and charges) are produced in accordance with the documented process for customer collateral.

A paper was presented to the Board in 2018, by SLAL, in accordance with the approved Scheme Calendar addressing various aspects of scheme administration and communication in particular around the disclosure of costs and charges. This includes SLAL control procedures relating to members’ fund holdings and costs and charges related to these holdings are accurate. The paper provides the Board with confidence that the controls currently in place are appropriate for the Master Trusts and will be reviewed on an annual basis.

Transaction Costs Trustees have an existing obligation to consider value for money and report on this annually to members; this consideration should include transactions costs. Previously there had not been any consistent standardised methodology to calculate costs to aid any comparison however in September 2017 the FCA published handbook rules in PS17/20 that were designed to assist scheme trustees carry out their duty in assessing value for money by requiring firms to disclose transaction costs calculated according to a standardised methodology.

With effect from 3 January 2018, firms were required to accept requests for transaction costs information. The information, calculated according to the standardised methodology, has to be provided within a reasonable time and in an acceptable format.

The regulations introduced requirements to publish further charge and transaction cost information. This information must be included in the DC chair’s statement within the annual report and on a public website.


What the new regulations do The new regulations are designed to:

• introduce requirements for certain occupational schemes offering money purchase benefits to publish further charge and transaction cost information, disclose this to members and others, and tell members where to find it.

From 6 April 2018 Trustees will have to:

• provide an illustrative example of the cumulative effect of costs and charges incurred by the member as part of the chair’s statement.

• publish that and certain other parts of the chair’s statement (or all, if a scheme wishes to do so) on a website.

There is an action on the Scheme Calendar for the Board to request transaction cost information.


Annual Benefit Statements include charges (£) and/or reference to rates (%) available online (in the Universal Strategic Lifestyle Profiles).

SLAL present a paper addressing various aspects of scheme administration and communication including matters relating to the accurate calculation and deduction of member charges.

There is an action on the Scheme Calendar for the Board to request transaction cost information.

We obtained and inspected:

• An Annual Benefit Statement for the Standard Life DC Master Trust to confirm that charges (£) and reference to charges (%) available online are included, as evidence of the stated procedure being followed.

• An Annual Benefit Statement for Stanplan A to confirm that reference to charges (%) available online is included, as evidence of the stated procedure being followed.


We obtained and inspected the administration paper prepared by SLAL, Scheme Calendar and minutes and confirmed that the Board had reviewed the administration paper prepared by SLAL, as evidence of the stated procedure being followed.


We obtained and inspected the SLAL Communications Paper, Scheme Calendar and minutes and confirmed that the Board had reviewed the SLAL Communications Paper, as evidence of the stated procedure being followed.


We obtained and inspected the Scheme Calendar for the Board and inspected that it detailed the Board’s request for transaction cost information, as evidence of the stated procedure being followed.



5.2 INVESTMENT GOVERNANCE 5.2.1 Protection of Assets

3. Scheme and member assets or entitlements are safeguarded from loss, misappropriation and unauthorised use. Financial protection and compensation available to members in the event of a default is assessed and documented.

Process/activitySLAL control procedures relating to whether member and scheme data is appropriately stored to ensure security and protection from unauthorised access and whether payments and transfers of assets are suitably authorised and controlled are considered in SLAL’s annual Pension Internal Control statement (PICS). This includes:-

• Strong authentication at application level is performed using complex passwords which have a “forced” requirement to be changed periodically.

• Segregation of duties requires the payment authoriser to be different from the person entering the payment details.

• Authorisation of payment or transfer follows delegated authority limits.

The PICS provides the Board with additional information on controls established by SLAL that are relevant to SLMTC and is reviewed by the Board on an annual basis in accordance with the approved Scheme Calendar.

Note – As referred to at the start of this section, the 2018 PICS published by SLAL in May 2019 addresses controls maintained in the year ended 31 December 2018. Upon receipt the Board reviewed the 2018 PICS, and whilst this review was subsequent to the reporting period of this Master Trust assurance report, this monitoring and oversight control forms a key aspect of the controls environment for relevant controls objectives referred to throughout Section 5.

The Standard Life DC Master Trust and Stanplan A are wholly-insured schemes invested in long term unitised investment-linked funds via a long term contract of insurance issued by SLAL. The Board is satisfied that the range of investment options is suitably diverse. SLMTC also holds a paid up With Profits insurance policy issued by the Prudential in relation to one section of the Standard Life DC Master Trust.

Assets are not held in a trustee bank account. Contributions are paid directly to SLAL and benefits are paid directly by SLAL to members, their dependants or the receiving scheme in relation to transfers.

Some fund managers of insured funds available to members may look to get a better return by lending some of the assets to certain financial institutions. This practice, also known as Stock Lending, happens at fund level rather than product or member level.

Neither the Board or SLAL have direct oversight of Stock Lending that is carried out by other fund managers, this is the responsibility of the underlying fund manager.

A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar on its IT controls including those related to unauthorised use of member data or entitlement.

In the event that SLAL or the Prudential were to become unable to meet their claims, the Board would seek to claim compensation under the FSCS on behalf of Master Trust members. The level of cover for long term contracts of insurance is 100%.

Where the Board invests in an insured fund run by an insurance company other than SLAL the Board is not eligible for compensation under the FSCS if that firm is unable to meet its claims. SLAL is also not eligible to make a claim. However, SLAL has not passed on the risk of that other insurer’s default (the ‘reinsurance credit risk’) to the Board. Therefore, in the unlikely event of a default by such an insurance company, SLAL would be expected to stand behind the failed insurer, as per the FCA Conduct of Business rules.

Member protection is reviewed on a triennial basis and is tracked through the Scheme Calendar.


As part of the Master Trusts’ communications package, SLAL offers a range of employer and member guides and websites. Both the employer and member guides and website contain information on the risks of investing in various asset classes, as well as the obligations of SLAL and the safeguards put in place.

The Master Trust guides and website also detail investor protection by signposting members to www.standardlife.co.uk/investor-protection


There is an entry in the Scheme Calendar to review the PICS annually.

SLAL present a paper to the Board on its IT controls including those related to unauthorised use of member data or entitlement. This will be reviewed and approved by the Board on an annual basis in accordance with the Scheme Calendar.

Member protection is reviewed on an annual basis in accordance with the Scheme Calendar.

The Master Trusts specific websites details investor protection by signposting members to www.standardlife.co.uk/investor-protection

We obtained and inspected the PICS and Scheme Calendar and confirmed that the Board had reviewed the PICS, as evidence of the stated procedure being followed.


We obtained and inspected the SLAL IT Controls Paper, Scheme Calendar and minutes and confirmed that the Board had reviewed the SLAL IT Controls Paper, as evidence of the stated procedure being followed.


We obtained and inspected the Scheme Calendar and minutes to confirm that the Board had reviewed member protection, as evidence of the event being diarised.


We observed that Master Trust specific websites sign posts members to information on investor protection maintained on the SLAL website, as evidence of the stated procedure being followed.



4. The design and on-going suitability of the default arrangement and range and risk profile of other investment options are regularly reviewed and monitored. This review is documented and the investment aims and objectives for the arrangement and investment policies for all investment options are included in an approved Statement of Investment Principles.

Process/activityThe Board, in conjunction with an authorised, regulated investment adviser, regularly reviews the suitability of the default solutions and the Statement of Investment Principles (SIP). The reviews cover all funds for both the Standard Life DC Master Trust and Stanplan A. There are entries in the Board’s Scheme Calendar to carry out the review at least every three years.

In Q2 2018 SLMTC requested that their investment advisers carry out a review of the default arrangements available to members of the Standard Life DC Master Trust. SLMTC have discussed the findings of the review with Standard Life and ongoing discussions have continued across the remainder of 2018 and into 2019. This review had not been diarised in the Scheme Calendar.

In addition the Board places reliance on SLAL’s investment governance process to ensure that investment options are performing as expected. SLAL carry out a Conduct Risk Review (CRR) for their full fund range on an annual basis. The review assesses the full range against the six outcomes of conduct risk to ensure it remains suitable for the intended customers.

Conduct risk is an integral part of the operational risk framework. There is a separate conduct risk policy to bring additional focus to ensure that appropriate measures and procedures are put in place across Standard Life in relation to the fair treatment of customers. Conduct risk is assessed as part of the operational risk capital assessment process.

SLAL business units must have in place documented procedures to ensure that reviews are performed for all existing customer propositions to monitor key risks, profitability and ability to meet customer needs.

The Board monitors the results of the Fund Alignment Review at each quarterly meeting by considering the RAG status and, in conjunction with an authorised regulated investment adviser, regularly reviews the suitability of the funds. The reviews cover all funds for both the DC Master Trust and Stanplan A.

A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar addressing various aspects of communications and governance. This includes SLAL control procedures relating to the risk profile of investment options available to members. The paper provides the Board with confidence that the controls currently in place are appropriate for the Master Trusts and will be reviewed on an annual basis.

In October 2015 the regulated investment adviser was requested to undertake a review of the SIP document for the Standard Life DC Master Trust. This review was completed and was considered by the Board in 2016. The regulated investment adviser ensured that the SIP reflects the Board’s updated investment advisory framework and meets the full statutory requirements.

The process to review the SIP for Stanplan A was initiated in 2016 and was concluded in 2017.

The SIPs for both the Standard Life DC Master Trust and Stanplan A are scheduled to be reviewed on a triennial basis and this is recorded in the Scheme Calendar. The next review for the Standard Life DC Master Trust is scheduled to start in 2019, Stanplan A is 2020.



The Board, in conjunction with an authorised, regulated investment adviser, formally review the suitability of the funds and default solutions at least every three years. The next scheduled reviews are currently diarised for 2019 and 2020 for Standard Life DC Master Trust and Stanplan A respectively. However, In Q2 2018 SLMTC requested that their investment advisers carry out a review of the default arrangements available to members of the Standard Life DC Master Trust.

In accordance with the Scheme Calendar, no review of the default strategies or other available investment options was undertaken in 2018 in relation to Stanplan A.

No exception noted.

We obtained and inspected the letter from SLAL responding to Standard Life Master Trust Company (“SLMTC”) questions regarding the investment arrangements and the report from the regulated investment adviser in relation to the Standard Life DC Master Trust to confirm that a review of the default had commenced in 2018.


We obtained and inspected minutes and confirmed that the Board had reviewed the report from the regulated investment adviser in relation to the Standard Life DC Master Trust.


There are entries in the Board’s Scheme Calendar to carry out a review of the suitability of the funds and default solutions at least every three years (the “Off the Shelf” default strategies were reviewed in 2016 (Stanplan A) and 2018 (DC Master Trust) by the Board).

As part of SLAL’s governance process a review of the default strategies, including bespoke solutions is carried out each year, with the underlying components looked at quarterly.

SLAL present a paper to the Board addressing various aspects of communications including matters relating to the risk profile of investment options available to members.

The SIPs for both the Master Trusts are scheduled to be reviewed on a triennial basis and this is recorded in the Scheme Calendar.

We obtained and inspected the Scheme Calendar to confirm a review of the suitability of the funds and default solutions has been diarised, as evidence of the stated procedure being followed.


We obtained and inspected SLAL’s Fund Alignment Review and minutes where the Board had reviewed these, as evidence of the stated procedure being followed.


We obtained and inspected the Communications Paper prepared by SLAL, the Scheme Calendar and meeting minutes to confirm that the Board had reviewed the Communications Paper prepared by SLAL, as evidence of the procedure being followed.


We obtained and inspected the Master Trust SIPs, Scheme Calendar and minutes and confirmed that the Board had reviewed, discussed or diarised a review of the SIPs, as evidence of the stated procedure being followed.



5. The performance of each investment option including the default arrangement(s) in which member funds are invested are regularly reviewed and monitored against objectives in the Statement of Investment Principles. This review is documented and approved.

Process/activityThe Board places reliance on SLAL’s investment governance process which is designed to monitor the performance of investment options. SLAL provides fund performance data on the available investment options for the Standard Life DC Master Trust and Stanplan A. This is included in the quarterly meeting packs that are distributed to the Board in advance of each meeting. The data is reviewed by the Board and if any areas of concern are identified the appropriate action is taken, e.g. request more detailed reports, request SLAL’s attendance at a Board meeting for face to face discussions, ask our investment advisers to carry out an independent analysis, etc.

The full SLAL fund range is reviewed as part of the Fund Alignment Review (FAR) and the Fund Analysis Review processes.

The FAR process is a key component of the SLAL Investment Proposition Governance focus area, which itself is part of the Investment Solutions Forum (ISF) policy framework.

The objective of the FAR process is to ensure the alignment of customer expectations with likely outcomes and is intended to mitigate potential business and reputational risks that may arise from any misalignment between customer expectations and the fund management process.

The Fund Analysis Review process looks to ensure that funds are performing in line with their objectives (including benchmarks, volatility and assets). All funds are assigned a status (RAG) to identify how it is performing – Red (Issue raised), Amber (Under investigation) or Green (No concerns).



The regulated investment adviser reviews the default strategies and other available investment options at least every 3 years (the last review was undertaken in 2016 and the next reviews are diarised for 2019 and 2020 for Standard Life DC Master Trust and Stanplan A respectively). However, In Q2 2018 SLMTC requested that their investment advisers carry out a review of the default arrangements available to members of the Standard Life DC Master Trust. The review is presented to the Board.

The Board, in conjunction with an authorised, regulated investment adviser, regularly reviews the suitability of the funds, and the Statement of Investment Principles.

SLAL produce quarterly investment performance information for the Board which contains information about the performance of the funds compared with the total return of the relevant benchmark index.

In accordance with the Scheme Calendar, no review of the default strategies or other available investment options was undertaken in 2018 in relation to Stanplan A.

No exception noted.

We obtained and inspected the letter from SLAL responding to Standard Life Master Trust Company (“SLMTC”) questions regarding the investment arrangements and the report from the regulated investment adviser in relation to the Standard Life DC Master Trust to confirm that a review of the default had commenced in 2018.


We obtained and inspected minutes and confirmed that the Board had reviewed the report from the regulated investment adviser in relation to the Standard Life DC Master Trust.


We obtained and inspected the SIP, review of the default arrangements and meeting minutes in which they were discussed, as evidence of the stated procedure being followed.


We obtained and inspected the quarterly investment performance reports and minutes where the Board had reviewed these, as evidence of the stated procedure being followed.



5.3 THE TRUSTEE BOARD

6. Fitness and propriety requirements for trustees are recorded and managed in accordance with a policy which is regularly reviewed and approved. The fitness and propriety of trustees is reviewed prior to appointment and annually thereafter. This review is documented and approved.

Process/activityA “Fitness and Propriety” Policy is maintained by the Board and is subject to review on an annual basis in accordance with the scheme calendar. In addition the Board operates a Board Effectiveness Policy which is subject to review on an annual basis in accordance with the Scheme Calendar (see control objective 10).

An assessment of the Board members’ fitness and propriety was carried out on appointment using the Board’s Fitness and Propriety – Eligibility to be a Trustee questionnaire.

Any identified gaps were addressed as part of the induction training that was delivered to the Board.

Each Board member’s appointment letter clearly articulates the potential time commitment (pre, during and post meeting) that is expected of the director. Section 3 (Roles and Responsibilities) lays out that the director is expected to perform their duties, whether statutory, fiduciary or common-law, faithfully and efficiently and diligently to a standard commensurate with both the functions of their role and their knowledge, skills and experience.

In the period from 1 January 2018 to 31 December 2018 there were no new Board member appointments.

Individual Board members are expected to comply fully with the “Trustee Knowledge and Understanding” requirements set out in the Pensions Regulator’s codes of practice and regulatory guidance.

The Board monitors for changes to the Pensions Regulator’s “Trustee Knowledge and Understanding” requirements set out in the Pensions Regulator’s codes of practice and regulatory guidance. Where any changes are identified relevant training, where required, will be supplied to the Board.

Each year Board members are expected to undertake a fitness and propriety assessment. The outcome of this assessment is discussed and any actions identified are reported on at quarterly Board meetings.

The timetable for this assessment is recorded on the Scheme Calendar.


A “Fitness and Propriety” Policy is reviewed and approved by the Board on an annual basis in accordance with the Scheme Calendar.

Each year Board members are expected to undertake a fitness and propriety assessment in accordance with the Scheme Calendar.

We obtained and inspected the “Fitness and Propriety” Policy, Scheme Calendar and minutes and confirmed that the Board had reviewed the “Fitness and Propriety” Policy, as evidence of the stated procedure being followed.


We viewed and inspected a sample of completed fitness and propriety assessments, Scheme Calendar and minutes to confirm that fitness and propriety assessment had been undertaken and diarised in the Scheme Calendar, as evidence of the stated procedure being followed.



5.4 SCHEME MANAGEMENT

7. Conflicts of interest are subject to ongoing monitoring and are identified, recorded and managed in accordance with a defined policy which is regularly reviewed and approved.

Process/activityThe Board maintains a “Conflicts of Interest” Policy (CoI) which is reviewed on an annual basis in accordance with the Scheme Calendar.

Conflicts of interest is a standing agenda item that is discussed at each quarterly Board meeting and any additional conflicts are raised at this point and recorded on the Conflicts of Interest Register. Specifically, reference to quarterly declarations of conflicts of interest has been added to quarterly entries on the Scheme Calendar. The register is reviewed and updated at each quarterly Board meeting.

The appointment documents for Board members of SLMTC contain a clause pertaining to conflicts of interest. This clause imposes a duty on the Board member to notify the Board, in writing, of any conflicts which exist or may arise. A duty is also imposed to disclose any direct or indirect interest in any matter being discussed at a Board meeting and to abstain from voting on that matter.

The Board Chairman’s approval should be sought before a Board member accepts any additional external appointments or the terms of an existing appointment are changed and the director believes a conflict of interest will arise. Any conflicts of interest must be authorised by the Board.

Outside appointments and potential or actual conflicts of interest are recorded in a register maintained by the secretary to the Board.


A Conflicts of Interest Policy is in place and is reviewed by the Board on an annual basis.

Conflicts of interest are a standing agenda item at Board meetings.

Conflicts declared are recorded in the Conflicts of Interest Register.

We obtained and inspected the Conflicts of Interest Policy, Scheme Calendar and minutes and confirmed that the Board had reviewed the Conflicts of Interest Policy, as evidence of the stated procedure being followed.


We obtained and inspected the Board meeting minutes to confirm that conflicts of interest were discussed.


Where new conflicts were declared, we inspected the Conflicts of Interest Register to confirm they had been recorded, as evidence of the stated procedure being followed.



8. Trustee levels of knowledge and understanding are managed and maintained in accordance with an approved training and development plan. This plan is regularly reviewed and updated.

Process/activityAn assessment of the Board members’ skills and knowledge was carried out on appointment using a Skills Matrix which takes into account the guidance as laid out by TPR. The matrix was designed around the requirements of Code of Practice 7 and extended to cover other relevant areas, for example GDPR. The Board re-assess their skills and knowledge annually in accordance with the Scheme Calendar.

The output of the initial and subsequent assessments informs the design of the Board’s training plan – the aim being to fill any gaps identified. The trustee training log records the training delivered. Progress against the training plan is tracked through the Board’s matters arising report.

The Board have 2 days aligned from the scheduled 7 days per annum for training purposes; more can be scheduled if required, to ensure that the Board has a working knowledge of SLAL and its products. The programme of training events is recorded and planned out in a Scheme Calendar (which provides an effective training plan) and this includes reports from SLAL in relation to SLAL’s administration control procedures, IT control procedures and communication control procedures. The Board’s training requirements are considered annually.

Further to this, Board members are able to request additional training in respect of specific areas that they are dealing with at any given time.

All Board members have completed the Trustee Toolkit. This may use a skills matrix to identify areas for future director training.


The programme of Board training events is recorded and planned out in accordance with the Scheme Calendar.

Board training requirements are considered annually by the Board.

An assessment of a Board members’ skills and knowledge is carried out on appointment.

We obtained and inspected the Scheme Calendar to confirm that it includes Board training events, as evidence of the stated procedure being followed.


We obtained and inspected the Board minutes to confirm that Board training requirements had been considered, as evidence of the stated procedure being followed.


There were no new Board members during the year.



9. A business/resource plan is maintained, that sets out when scheme related activities are due to take place or be completed, and regularly reviewed to ensure that resources are available and allocated.

Process/activityA Scheme Calendar is in place and details key rolling agenda items and provides the Board with a rolling agenda of governance matters for discussion and approval. This is maintained on a quarterly basis by the Board’s secretary after approval of the Scheme Calendar review discussed below.

The Scheme Calendar is maintained by the Board’s secretary and is regularly reviewed to make sure it includes all key areas of governance that need to be regularly considered by the Board, and to make sure resources are available to produce and present accompanying material to the Board. The Scheme Calendar is reviewed at all quarterly Board meetings.


The Board maintains a Scheme Calendar which documents in which quarterly meeting the Board will consider specific areas of governance risks. The Scheme Calendar is reviewed on a quarterly basis.

We obtained and inspected the Scheme Calendar and minutes to confirm that the Board had reviewed the Scheme Calendar, as evidence of the stated procedure being followed.


10. Roles, responsibilities and duties of all trustees, advisers and service providers are documented and the performance and quality of their service is subject to regular documented reviews. The suitability of advisers and service providers is reviewed against criteria before appointment and this review is documented.

Process/activityA letter of appointment is provided to each Board member when they assume their role on the Board. Section 3 (Roles and Responsibilities) lays out that the Board member is expected to perform their duties, whether statutory, fiduciary or common-law, faithfully and efficiently and diligently to a standard commensurate with both the functions of their role and their knowledge, skills and experience whilst a member of the Board.

The Board operate a Board Effectiveness policy which is subject to review on an annual basis in accordance with the Scheme Calendar. The Board Effectiveness Policy aims to enhance the effectiveness of the Board by setting out desired standards and behaviours, how Board effectiveness will be assessed and how the outcomes of assessment will be acted upon.

As part of the due diligence exercise a procurement exercise is undertaken jointly by the Board and Standard Life to determine the suitability of new adviser appointments. This includes criteria used to determine the suitability of potential new appointments. The Board keeps copies of all engagement documentation in respect of all advisers.

There is a scheduled annual review for adviser performance detailed in the Scheme Calendar. This process allows the Board to comment on the performance of advisers and determine whether improvements or a re-tender would be necessary.

There is also a Roles & Responsibilities document in place that details the specific tasks that take place for the Master Trusts, how these are carried out and by whom.


This document sets out various tasks and responsibilities and assigns an owner to each of those tasks. The owner of these tasks varies between the Board, SLAL, the Master Trust auditors, etc.

As well as designating an owner for each role and responsibility, each item is given a timescale for completion and, as appropriate, an overseer to monitor progress and compliance. This document is regularly reviewed. The Roles and Responsibilities document sets out accountabilities and includes those relevant to SLAL.

To maintain services levels between the Board and SLAL, service contracts are in place between the previous trustee (PTL) and SLAL. These were assigned to the Board as part of the migration process and the review and amendment of these service agreements is an ongoing process.

Service Level Agreements (SLAs) are in place in respect of the administration service via the administration agreement between the Board and SLAL. The Board reviews the performance of SLAL against the SLAs. It also considers member complaints raised by SLAL and remedial action taken as a result. The Board will undertake annual reviews of the performance of service providers.

A due diligence checklist is in place that requests basic due diligence information from all advisers prior to appointment. Additional due diligence requirements are determined by the Board for each case.

For the period from 1 January 2018 to 31 December 2018 there was no new adviser or service provider appointments. The decision was taken by the Board to extend the contract of the reporting accountant for the Master Trusts; this helps to ensure consistency in terms of testing and reporting for the AAF.

The Board procured the services of the reporting accountant to support its application for Master Trust Authorisation. Crowe were asked to undertake an independent external assessment of certain Systems and Processes requirements.

SLAL, as the Scheme Administrator, maintains a PICS document for occupational and personal pension schemes. The purpose of the PICS is to describe the activities by Standard Life’s UK & Europe business to ensure the administration of its pension business is carried out effectively in accordance with scheme rules, the requirements of the law and good standards of governance & internal control. A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar addressing various aspects of scheme administration.

The PICS is reviewed by the Board on an annual basis in accordance with the approved Scheme Calendar.



The Board maintain a Roles & Responsibilities document. This document is reviewed annually.

Terms of engagement set out the responsibilities of advisers and service providers to the Master Trusts and are reviewed as part on the annual review of all advisers.

The Board maintain a Board Effectiveness Policy which is subject to review in accordance with the Scheme Calendar.

We obtained and inspected the Roles and Responsibilities document, Scheme Calendar and minutes to confirm that the Board had reviewed the Roles and Responsibilities document, as evidence of the stated procedure being followed.


We obtained and inspected the Scheme Calendar and meeting minutes to confirm that the Board had reviewed terms of engagements as part of their annual review, as evidence of the stated procedure being followed.


We obtained and inspected the Board Effectiveness Policy.


We obtained and inspected the Scheme Calendar and meeting minutes to confirm that the Board reviewed the Board Effectiveness Policy, as evidence of the stated procedure being followed.


A due diligence checklist is in place that requests basic due diligence information from all advisers prior to appointment.

The Board reviews the performance of SLAL against the SLAs and undertakes annual reviews of the performance of service providers.

The Board will review where terms of appointment of advisers and service providers are extended, or where they are asked to undertake additional services.


For a sample of advisers, we obtained and inspected the completed due diligence checklist, as evidence of the stated procedure being followed.

Note – There were no new adviser or service provider appointments during the period from 1 January 2018 to 31 December 2018.


We obtained and inspected the advisor review summary, Scheme Calendar and meeting minutes to confirm that the Board reviewed the performance of service providers, as evidence of the stated procedure being followed.


We obtained and inspected the terms of appointment of advisers and service providers where they are asked to undertake additional services and we confirmed that the board had reviewed this extension.





11. Discontinuance plans, which address how member assets or entitlements are safeguarded in the event of the Master Trust or any key service provider failing, defaulting or transferring ownership, are documented, approved and maintained.

Process/activityThe Standard Life DC Master Trust and Stanplan A are wholly-insured schemes invested in long term unitised investment-linked funds via a long term contract of insurance issued by SLAL. The Board of also holds a paid up With Profits insurance policy issued by the Prudential Assurance Company Limited (the “Prudential”) in relation to one section of the Standard Life DC Master Trust.

The Board has had a Discontinuance Plan in operation since 2015 which applies to the Master Trusts and addresses certain actions the Board may need to take and considers how member entitlements are likely to be protected in the event that:-

• SLAL becomes insolvent

• SLAL withdraws from the pension market or ceases to offer either of the Master Trusts

• The Board decides to move the Scheme to another provider or scheme administrator

• The Board decides to wind up either of the Master Trusts

• Changes to the law make the Master Trusts untenable

Under the new Master Trust Authorisation regime there is a requirement for the Board to produce a Continuity Plan which articulates the actions that would need to be taken if one of the defined triggering events occurs; the Continuity Plan was produced and submitted as part of the schemes authorisation application. It will be maintained on a regular basis in line with the rules of the supervisory regime when they are issued. The Continuity Plan is expected to supersede the Discontinuance Plan.

In the event that SLAL or the Prudential were to become unable to meet its claims, the Board would seek to claim compensation under the Financial Services Compensation Scheme (FSCS) on behalf of scheme members. The level of cover for long term contracts of insurance is 100%.

The governing principles of the Master Trusts are set out in the trust deeds (or declaration of trust as appropriate) and scheme rules. These rules contain provisions which govern any decision to wind up the scheme(s) by the Board and describe the process for the distribution of any assets and funds.

Some members of Stanplan A benefit from guarantees in relation to With Profits investments. These guarantees are provided by SLAL rather than the SLMTC.

The Board itself does not trade and does not hold any assets other than in its capacity as pension scheme trustee. However, the trust deeds of the Standard Life DC Master Trust and Stanplan A contain an indemnity whereby SLAL indemnifies the Board and Board members for any costs, charges, damages, expenses, losses, penalties or taxes incurred in connection with the plan for so long as the plan is a wholly insured scheme with SLAL as the relevant assurance company.


A discontinuance plan is in place which is reviewed and approved annually by the Board in accordance with the rolling Scheme Calendar.

The Board have noted this will be superseded by the Continuity Plan that will be implemented and reviewed during the authorisation work.

We obtained and inspected the discontinuance plan, Scheme Calendar and minutes and confirmed that the Board had reviewed the discontinuance plan, as evidence of the stated procedure being followed.



12. A risk management framework is established to identify, evaluate and treat scheme risks. Risks are recorded in a risk register which is reviewed at least annually.

Process/activityRisk management is a key aspect of the governance of the Master Trusts. To allow the Board to document, monitor, mitigate and control the risks to the Master Trusts, a ‘risk register’ is maintained. The risk register is a standing agenda item for all quarterly Board meetings and is tracked through the Scheme Calendar.

Risks that are identified by the Board, their advisers or SLAL are each documented in the register under a ‘risk category’. These categories include financial risks to the Master Trusts and its members as well as operational, regulatory or strategic risks amongst others.

The impact and likelihood of each risk (before any mitigation is accounted for) is estimated and documented. The register then lists how the risks are mitigated in any way and then provides a second estimation of impact and likelihood. Finally, a post-mitigation score is provided to allow an easy assessment of how exposed to risk the Master Trusts and its members are.

Whilst the risk register is subject to regular review and amendment as required, each risk that is recorded in the register is given an individual review frequency and the next review date is documented.

The current risk register was designed in 2017 replacing the 2015 iteration. The new version began with a clean sheet of paper and a question: “what would the Board want the Master Trusts to provide to them if they were a member?”

The risk register is subject to ongoing review.

Enterprise Risk Management FrameworkAn Enterprise Risk Management (ERM) framework is in place across the Standard Life Group and documented within the System of Governance (SoG). The SoG is assessed for effectiveness annually and signed off by Standard Life plc’s CEO and CRO.

Components of the ERM Framework are: Emerging Risk, Risk Control Processes, Risk & Capital Models and Strategic Risk Management & Risk Culture.

Key risks and exposures are assessed regularly and reported through Standard Life plc business units and Group Enterprise Risk Committees (ERMCs) through to the Risk & Capital Committee (RCC) which is a non-exec committee of the Standard Life plc Board.

The ERM framework is fully documented in PICS which the Board review annually.


The Board maintains a ‘risk register’.

The risk register is a standing agenda item for all quarterly Board meetings and is reviewed by the Board in accordance with the Scheme Calendar.


We obtained and inspected the risk register to confirm in place, as evidence of the stated procedure being followed.


We obtained and inspected the Scheme Calendar and minutes to confirm that the Board had reviewed the risk register, as evidence of the stated procedure being followed.





5.5 ADMINISTRATION

5.5.1 Core Financial Transactions

13. Core financial transactions are processed promptly and accurately.

Process/activitySLAL operates a number of control processes which are designed to ensure that core financial transactions are processed in line with expectation. High level descriptions of the processes in place are documented in the PICS which is reviewed by the Board on an annual basis in accordance with the Scheme Calendar. This includes procedures in relation to the following areas of administration:-

• Automated systems are designed to ensure consistent, timely and accurate receipt and allocation to the correct funds for regular and single payments.

• Authorised switches between investment options and changes to investment instructions are processed accurately and in a timely manner (including Lifestyle profiles).

• Transfer values are calculated in accordance with policy provisions and are paid on a timely basis.

• Benefits are calculated on the basis of accurate fund values and are set up and paid on a timely basis. Benefits are terminated correctly and in a timely manner on the basis of valid information.

These processes are reviewed regularly to ensure that they remain fit for purpose and are supported by Standard Life’s automated workflow system which allows for work to be enabled, tracked and managed.

A dedicated controls team, within SLAL, actively manages manual payments (including automation failures) and the reporting of missed contributions to the Pensions Regulator.

Quality Assuring is also in operation within SLAL to give confidence that the core financial transactions are processed in line with the defined processes and service levels.

Additional Core Financial Transactions Management Information (CFTMI) was implemented and presented to the Board at their quarterly Board meetings during 2018. The CFTMI provides the Board with information on all core financial transactions completed within the reporting period and the length of time taken to complete. Any anomalies in the data are highlighted and discussed with the appropriate representatives from SLAL.

The Board have an action in their Scheme Calendar to receive a paper from SLAL on the processing of core financial transactions on an annual basis. A paper was presented to the Board, by SLAL, in accordance with the Scheme Calendar addressing various aspects of scheme administration. This included SLAL control procedures relating to how core scheme transactions are completely and accurately processed in a timely manner and recorded in the proper period. The paper provides the Board with confidence that the controls currently in place are appropriate for the Master Trusts and will be reviewed on an annual basis.




The Board reviews the performance of SLAL administration against SLAs.

SLAL present a paper addressing various aspects of administration including matters relating to the prompt and accurate processing of core scheme transactions.

Information relating to how long core financial transactions take to be processed is detailed in the quarterly MI that is provided to the Board by SLAL.



For a sample, we obtained and inspected the service review of administration performance by the Board and the meeting minutes, as evidence of the stated procedure being followed.


We obtained and inspected the administration paper prepared by SLAL, the Scheme Calendar and meeting minutes to confirm that the Board had reviewed the administration paper prepared by SLAL, as evidence of the stated procedure being followed.


We obtained and inspected the quarterly MI (Management Information) Packs provided to the Board to confirm they include information relating to how long core financial transactions take to be processed as evidence of the stated procedure being followed.


14. Contributions are invested and allocated in accordance with member instructions or the requirements of the default arrangement.

Process/activityContribution allocation is fully automated with no manual intervention in terms of buying units.

SLAL’s IT System has multiple system applications within their “single administration platform” operating system which are used to, automatically or through user input by an administrator automatically, complete different tasks e.g. paying contributions in, update member personal records, settling benefits etc.

The automated systems are designed to ensure consistent, timely and accurate receipt and allocation to the correct funds of regular and single payments.

The PICS, which is reviewed by the Board on an annual basis in accordance with the Scheme Calendar, provides high level summary of the controls that are in place to ensure that:-

• Contributions are received and allocated accurately and in a timely manner.

• Authorised switches between investment options and changes to investment instructions are processed accurately and in a timely manner (including Lifestyle profiles).

These processes are reviewed regularly to ensure that they remain fit for purpose.

Reconciliations are carried out between Standard Life’s Finance and Customer Operations areas to ensure contributions are accurately recorded.

Members of the Master Trusts are made aware of where their contributions are invested as well as in what proportion through the annual benefit statements that they receive.


A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar addressing various aspects of scheme administration. This included SLAL control procedures relating to how contributions are received and allocated accurately and in a timely manner.

The paper provides the Board with confidence that the controls currently in place are appropriate for Master Trusts and will be reviewed on an annual basis.



Members of the Master Trusts are made aware of where their contributions are invested as well as in what proportion through the annual benefit statements that they receive.

SLAL present a paper to the Board addressing various aspects of administration including matters relating to the investment of contributions.



We obtained and inspected a sample of Annual Statements.


We obtained and inspected the administration paper prepared by SLAL, the Scheme Calendar and meeting minutes to confirm that the Board had reviewed the administration paper prepared by SLAL.


15. Transaction errors are identified and rectified.

Process/activityWhere a financial transaction is not processed promptly, due to an error by the administrator, business rules are in place to ensure that there is no loss to the member. Allocation of units is backdated to the original date of receipt of the payment/ the receipt of supporting information needed to allocate the payment.

The PICS, which is reviewed by the Board on an annual basis in accordance with the approved Scheme Calendar, provides a high level summary of the controls that are in place to ensure that any errors are rectified promptly. These include (but not limited to):-

• The SLAL controls team identify automation failures in key processes (such as contribution allocation, Annual Benefit Statements and new business documentation) and manage them through to completion of the original request so that members are treated fairly.

• All complaints are dealt with by trained complaint handlers within the Customer Relations Department who follow established processes that adhere to the FCA’s DISP rules.

• Complaints are subject to root cause analysis which is designed to ensure systemic issues are resolved.

Any errors/complaints are identified and provided to the Board in the quarterly MI. Complaints are discussed at Board meetings where SLAL provide context on the cases in question.



A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar addressing various aspects of scheme administration. This included the processes in place to ensure that any errors are rectified promptly.

The paper provides the Board with confidence that the controls currently in place are appropriate for Master Trusts and will be reviewed on an annual basis.


Any errors/complaints are identified and provided to the Board in the quarterly MI.


SLAL present a paper to the Board addressing various aspects of administration including matters relating to the rectification of transaction errors.

We obtained and inspected the quarterly MI Packs provided to the Board to confirm they include any errors or complaints.


We obtained and inspected the PICS and Scheme Calendar and confirmed that the Board had reviewed the PICS.




16. Cash is safeguarded and all payments are suitably authorised and controlled.

Process/activitySLAL does not accept or deal with cash in any aspect of their processes; all payments in and out must be made via SLAL’s bank account in the form of CHAPS, BACS, and direct debit or cheque payments.

SLAL control procedures relating to whether payments and transfers of assets are suitably authorised and controlled are considered in SLAL’s annual PICS. This includes:-

• Segregation of duties requires the payment authoriser to be different from the person entering the payment details.

• Authorisation of payment or transfer follows delegated authority limits.

Payment authorisations operate within SLAL’s administration team and follow delegated authority limits. The Delegated Authorities process confirms levels of responsibility, number and types of authorisers per transaction and what levels of authorisation are across all levels of their business. The delegated authorities have been formally approved by the Board.

A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar addressing various aspects of scheme administration. This will include SLAL control procedures relating to payment authorisation mandates, attributable to authorised personnel as listed in the Delegated Authorities Document operated by SLAL. The paper provides the Board with confidence that the controls currently in place are appropriate for the Master Trusts and will be reviewed on an annual basis.



Payment authorisations operate within SLAL’s administration team and follow delegated authority limits.

SLAL present a paper to the Board on its scheme administration including matters related to the safeguarding of cash and payments authorisations. This will be reviewed and approved by the Board on an annual basis in accordance with the Scheme Calendar.


We observed that Board approved delegated payment authority limits are in operation.


We obtained and inspected the administration paper prepared by SLAL, Scheme Calendar and minutes and confirmed that the Board had reviewed the administration paper prepared by SLAL.




17. Late and inaccurate contributions are pursued and resolved.

Process/activitySLAL operates a control process to deal with contributions that are outside of the permitted timescales as communicated by the Pensions Regulator.

Standard Life, the chair of the Board and senior members of the Automatic Enrolment team within The Pensions Regulator have had extensive discussions about contribution monitoring throughout 2017 and 2018. These discussions have focused on the administrator’s processes for chasing and reporting contribution payment failures/Persistent Late Payers and contribution monitoring for the trustees.

The Pension Regulator has reviewed the process and no issues were raised as a result.

A report detailing outstanding payments is produced automatically on a monthly basis. The Standard Life team investigate outstanding contributions in line with the Pensions Regulator guidance and where necessary will work with the employers until payment of the outstanding contributions is made. If payment is not received by the latest date possible it will be reported to the Pensions Regulator via their online portal.

A communication will be issued and brought to the Board’s attention, informing it of any payment failure.

Information relating to employers of the Master Trusts who have been reported to the Pensions Regulator is included within the suite of management information that is presented to the Board on a quarterly basis.

SLAL have already introduced a range of controls to help try and monitor inaccurate or insufficient payments, these include:-

Remind the employer of their obligation regarding contribution payments on behalf of the member and certify their accuracy.

• Ask Employees to review the accuracy of contributions amounts received on an annual basis.

Any Master Trust employers who are deemed to be a Persistent Late Payer are recorded and reported on to TPR, and the Board would be made aware of these cases.

The PICS, which is reviewed by the Board on an annual basis, provides high level summary of the controls that are in place to try and ensure that:-

• Contributions are received in accordance with scheme rules and relevant legislation.

• Contributions are received and allocated accurately and in a timely manner.



A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar addressing various aspects of scheme administration. This included SLAL control procedures around ensuring contributions are

received in accordance with scheme rules and relevant legislation. The paper provides the Board with confidence that the controls currently in place are appropriate for the Master Trusts and will be reviewed on an annual basis.



SLAL present a paper to the Board addressing various aspects of administration including matters relating to the collection of contributions.

Reports are now run each month based on prior month contributions and will summarise all those payments that are late within the month and paid after the 22nd of following month.

Information relating to payment failures is detailed in the quarterly MI that is provided to the Board by SLAL. Where there are no payment failures, the quarterly MI Packs provide a negative affirmation.





Through enquiry and representation we confirmed that there were no payment failures during the reporting period of this AAF report which resulted in statutory reporting to the pensions regulator (Late Paid Contributions) We reviewed new monthly reports of late contributions.


We obtained and inspected the quarterly MI Packs provided to the Board to confirm they include information relating to payment failures.


5.5.2 Business and Disaster Recovery

18. Data and systems are backed up regularly, retained offsite and regularly tested for recoverability. Business and information systems recovery plans are documented, approved, tested and maintained.

Process/activityBusiness recovery plans are incorporated within the SLAL business continuity framework.

SLAL is ISO22301 certified for Business Continuity and the data hosting partner is ISO27001 certified for Information Security. In addition, ITIL processes (including Software Asset & Configuration Management) are ISO 20000 accredited.

Controls currently in place are as follows:

• There are standards for the creation, review and updating of Business Continuity Plans (BCP).

• SLAL’s Business Continuity framework has clearly defined roles and responsibilities.


• SLAL’s Business Continuity framework is developed by staff that understand the processes and are able to populate plans with meaningful content.

• SLAL provide regular forums and consistent training for role holders which educate them on the importance of business continuity, their role and responsibilities.

• SLAL have a system (BCMS) and documented processes for the creation, storage and updating of BCP’s.

• The BCMS system has automated alerting which notifies plan representatives when plans and testing dates are becoming due or are due and plan owners when they are overdue.

• SLAL Directors perform a sign-off of their areas recovery numbers.

• SLAL’s BC framework provides oversight at all levels with a hierarchy of role holders and stakeholders:

– Security & Resilience

– Function Directors

– BC Coordinators

– BC Plan Owners

– BC Plan Reps

• Quarterly scorecards are produced which detail compliance to minimum standards and an overall assessment of compliance/capability.

• Quarterly policy returns are completed by business areas which detail their compliance to minimum standards.

• On an annual basis SLAL review the contents of 100% of their critical BCP’s.

SLAL control procedures relating to the integrity and availability of client data and processing interruptions are considered in SLAL’s annual PICS document, including procedures addressing data and systems backup, for example:-

• All production data is held on computer disk and mirrored between the two data centres.

• Monitoring of the successful completion of back-up routines is carried out daily.


A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar on its IT controls including those related to data and systems back up procedures and business continuity. The paper provides the Board with confidence that the controls currently in place are appropriate for Master Trusts and will be presented on an annual basis.


A BCP is in place which is reviewed and approved annually by the Board in accordance with the rolling Scheme Calendar.


SLAL present a paper to the Board on its IT controls including those related to data and systems back up procedures and business continuity. This will be reviewed and approved by the Board on an annual basis in accordance with the Scheme Calendar.

We obtained and inspected the BCP, Scheme Calendar and minutes and confirmed that the Board had reviewed the BCP.




We obtained and inspected the SLAL IT Controls Paper, Scheme Calendar and minutes and confirmed that the Board had reviewed the SLAL IT Controls Paper.



19. The capacity of an administration system to take on new business is assessed, approved and regularly monitored.

Process/activityStanplan A is closed to new schemes although new members can still join existing schemes. As a result, overall membership of Stanplan A is gradually reducing. It is administered on a legacy administration platform; there haven’t been any recorded concerns of capacity challenges for Stanplan A.

The Master Trust products are currently serviced through SLAL’s Life and Pension Administration Platform (LPAS). This platform is the strategic platform for SLAL products and was developed in 2010. The LPAS platform was built to accommodate a large volume of business; the intention is that all modern pension products will be administered on this platform.

SLAL reviews capacity use every quarter across their entire estate to ensure growth is clearly understood and additional capacity is added in time to avoid service impact (this aligns to ISO20000 Capacity Management controls).

As part of the quarterly submission of administration reporting to the Board, information is supplied in relation to matters relating to capacity, e.g. participating employers joining or leaving the scheme.


Management Information (MI) is supplied to the Board via Employer Pipeline Documents in relation to matters relating to capacity, e.g. participating employers joining or leaving the scheme. This information is provided at all quarterly Board meetings.

We obtained and inspected the Board papers and minutes and confirmed that the Board had reviewed the Employer Pipeline Documents.


20. New business take-ons are properly established in accordance with the Standard Life DC Master Trust’s rules and contractual arrangements.

Note: This control objective is not relevant to Stanplan A as this arrangement is closed to new business.

Process/activityEmployers who join the Standard Life DC Master Trust are required to complete and sign a Participation Agreement which sets out the responsibilities of the employer.

SLAL process any new take-ons in line with the Trust Deed and General Rules as well as the Special Rules that may be applicable. SLAL’s PICS, which is reviewed by the Board on an annual basis, provides details as to how this is achieved including details about the systems used to manage new take-ons, validation and quality assurance controls.

Joining is a fully automated process with joining information being submitted via a secure online user interface – GroupPensionZone (GPZ).

Validation exists within the online joining system to ensure that all new business complies with the master trust rules. This validation is built into GPZ to ensure that SLAL receives all mandatory data items. The data is then validated against the rules (e.g. Default retirement age, Qualifying Workplace Pension Scheme, contribution structure, including default investment instruction, payment method and frequency and scheme/employer preferences) which are recorded on SLAL’s administration platforms.


Where a new scheme is implemented within the Standard Life DC Master Trust, the Board are made aware during the quarterly Board meeting. If there are any significant new entrants then the Board will generally be made aware in advance of the meeting.

SLAL control procedures relating to whether new members are properly set up according to scheme rules, policy documentation and individual elections are considered in SLAL’s annual PICS. The PICS is reviewed by the Board on an annual basis in accordance with the approved Scheme Calendar.

A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar, addressing various aspects of scheme administration, managed through GPZ. This included SLAL control procedures relating to the on boarding process and how the system ensures that the uploading of member data and ongoing administration system ensures alignment with the Deeds of Participations and other constitutional documentation. The paper will provide the Board with confidence that the controls currently in place are appropriate for the Standard Life DC Master Trust and will be presented on an annual basis.


All new employers joining the Standard Life DC Master Trust are required to complete and sign a Participation Agreement – this is signed by the Board and the participating employer.


Validation exists within the online joining system to ensure that all new business complies with the Standard Life DC Master Trust rules.

Where a new scheme is implemented within the Standard Life DC Master Trust, the Board are made aware during the quarterly Board meeting.

SLAL present a paper to the Board addressing various aspects of scheme administration, managed through GPZ. This will be reviewed and approved on an annual basis in accordance with the Scheme Calendar.

For a sample of employers joining the Standard Life DC Master Trust during the year, we obtained and inspected the Participation Agreements for employers.




Through enquiry and observation we confirmed that validation procedures are in place and in operation within the online joining system.


We obtained and inspected the Board papers and minutes and confirmed that the Board had reviewed the Employer Pipeline Documents.


We obtained and inspected the administration paper prepared by the SLAL, Scheme Calendar and minutes and confirmed that the Board had reviewed the administration paper prepared by SLAL.



5.5.3 Data Quality and Security

21. Member data is complete and accurate and is subject to regular data evaluation.

Process/activityMaster Trust records are tested for the existence of common data.

A report is run against each individual member record to check for the presence of each common data point and a number of points of conditional data. The check confirms whether data exists, whether it is correctly formatted and returns results in a tabular format in the way the SLAL understands is recommended by the regulator. 100% of the Standard Life DC Master Trust and a sample of Stanplan A are currently tested. In 2019 the testing of Stanplan A will be extended to 100% as per the Standard Life DC Master Trust.

SLAL also provides information on common and conditional data for and on behalf of the trustee in the Scheme Return, which is overseen by the Board.

Any significant data errors or challenges, which are unlikely when considering controls, would also be brought to the attention of the Board, as and when they occur or at the quarterly Board meeting by SLAL.

The output is reviewed by SLAL’s Customer Operations Technical team, any issues are fully investigated and where necessary data obtained/cleaned.

The results are provided to the Board on an annual basis.

SLAL control procedures relating to whether member records consist of up to date and accurate information are documented in SLAL’s annual PICS. In particular:-

• Members’ records (including financial) are set up and altered in accordance with documented procedures.

• The quality assurance framework gives assurance that member records are accurately updated in line with client requests.



Master Trust records are tested (100% of Standard Life DC Master Trust and a sample of Stanplan A) for the existence of common data on an annual basis. Each time the scoring is run the output is reviewed by SLAL’s Customer Operations Technical team, any issues are fully investigated and where necessary data obtained/cleaned. The results of this exercise are scheduled to be provided to the Board on an annual basis.


We obtained and inspected the results of the exercise, Scheme Calendar and minutes and confirmed that the Board had reviewed the results.





22. Monitoring of operations implemented to support the security of data transmissions and measures implemented to mitigate the threat of malicious electronic attack are regularly reviewed and documented.

Process/activityA paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar, on its IT controls. The paper provides the Board with confidence that the controls currently in place are appropriate for Master Trusts.

This is presented on an annual basis and includes SLAL’s Protection of Information and Resilience policy (PIR) which covers information security, physical security and business continuity; it also includes data protection and records management. This policy, in combination with SLAL’s sub policies of their Group Operational Risk Framework, provides a clear structure for an effective internal control system to manage risks to the confidentiality, integrity and availability of information. The policy covers information held, processed and transmitted in electronic form.

This policy requires SLAL’s business units to:

• Have an organisational framework for protection of information and resilience

• Comply with all legal and regulatory requirements for the protection of information and resilience including managing records and complying with data protection legislation

• Identify, understand and manage information and resilience risks and non-compliance with policy, controls and standards

• Identify, understand and manage their control environment including:

1. Incident management. 2. Security of staff. 3. Secure systems development and

delivery.4. Access to information and systems. 5. Business continuity management.

Policy owners within each SLAL business unit are responsible for implementation and compliance with the PIR policy. They direct the Policy Implementation Managers who are responsible for the day to day implementation and controls and also monitor compliance with the policy. SLAL’s Director of Information & Technology Strategy, as Group Policy Owner for the PIR policy, maintains oversight of activities and compliance within all SLAL business units.

Malware protection is run on all desktops, servers (Windows and Linux), browser and email proxies. SLAL also use software to block known malware sites and block certain attachment types e.g. exes. There is an ongoing education program advising users not to click on links from untrusted sources.

SLAL encrypt any sensitive data they need to transmit. They have a range of controls in place to prevent unauthorised data disclosure the key aspects being:

• Two layer firewall model in place, supplemented by a managed intrusion prevention system;

• Web applications firewall in blocking mode;

• Static code analysis; and

• Penetration testing.




SLAL present a paper to the Board on its IT controls including those related to the security of data transmissions and measures implemented to mitigate the threat of malicious electronic attack (cyber risk). This will be reviewed and approved by the Board on an annual basis in accordance with the Scheme Calendar.

In addition a copy of the PIR report was incorporated into the SLAL paper presented to the Board.

Malware protection is part of a standard build and is run on all desktops, servers (Windows and Linux), browser and email proxies. Monthly control testing is performed to identify any desktops that do not have malware protection and follow-up actions are taken. SLAL also use software to block known malware sites and block certain attachment types e.g. exes.

SLAL encrypt any sensitive data they need to transmit using TLS, secure gateway or password protected.





We obtained and inspected a copy of the PIR policy.


We enquired with SLAL IT on the standard procedures for malware protection and observed that the dashboard is operating identifying computers with and without malware protection.


Through inquiry with SLAL IT, we confirmed that data transmissions to external parties are encrypted.


23. Physical and logical access to computer systems, and member and Master Trust records and data, is restricted to authorised persons.

Process/activitySLAL control procedures relating to whether access to client and corporate information is restricted to authorised internal or third parties (i.e. Logical and Physical Access controls) are considered in SLAL’s annual PICS. The PICS is reviewed by the Board on an annual basis in accordance with the approved Scheme Calendar.

A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar on its IT controls. The paper provides the Board with confidence that the controls currently in place are appropriate for Master Trusts and will be provided on an annual basis.

Within SLAL access to various systems and transactions is controlled. A local systems administrator (LSA) has responsibility for maintaining and coordinating systems/transaction access. A business justification must be provided for all requests for systems/transaction access and must be authorised by the user’s direct manager.

SLAL’s physical security measures are designed to control access to and egress from SLAL’s premises and access to designated assets and materials. This includes but is not limited to: information, records, physical assets and Information Communications Technology (ICT) which enable or support SLAL’s business operations and customer services.


Premises access and egress – SLAL ensure that access to and from any of their premises and designated secure areas, including but not limited to areas accommodating ICT assets, within these premises are protected from unauthorised access:

• Perimeter and site security measures including but not limited to Intruder Detection Systems (IDS), Closed Circuit Television (CCTV), lighting and guarding.

• Building access security controls including but not limited to ID cards, physical and electronic assess mechanisms; CCTV, lighting and guarding.

• Opening and lockdown procedures.

• IT Network Security Services response

• SLAL employs physical access controls across all their buildings which are identity card based. These identity cards also limit access to sensitive areas such as machine halls and communication rooms for those staff who have valid reasons for such access. SLAL employs Role Based Access Control as a means to limit staff to only the resources necessary to perform their role. SLAL also employs logging and monitoring for access to sensitive data and functions and they have an automated movers, leavers and joiners process.

High Security areas (e.g. server halls) are restricted to designated staff only. All server components are racked and located within SLAL’s datacentre and continuity sites. Access to computer rooms are limited to authorised staff via the swipe card system. All access is reviewed/granted in advance. All external contract staff/companies are required to submit the appropriate security and health and safety pre-requisites prior to being granted access to SLAL’s premises.

Logical access to SLAL computer systems, programs, data and parameters is restricted to properly authorised individuals based on their role and responsibilities. Users are required to maintain complex passwords to access applications and SLAL operate a “forced” requirement for these to be changed periodically.

Access for leavers is revoked on termination date or request from management, followed by removal of access to all systems and deletion of their user account.




SLAL present a paper to the Board on its IT controls including those related to physical and logical access to computer systems and restrictions to member data. This will be reviewed and approved by the Board on an annual basis in accordance with the Scheme Calendar.

A local systems administrator (LSA) has responsibility for maintaining and coordinating systems/transaction access.

Security measures are in place at all buildings, including ID cards and electronic access mechanisms. In addition CCTV and Intruder Detection Systems are also in operation. High Security areas (e.g. server halls) are restricted to designated staff only.

Logical access to SLAL computer systems, programs, data and parameters is restricted to properly authorised individuals based on their role and responsibilities.

Users are required to maintain complex passwords to access applications and SLAL operate a “forced” requirement for these to be changed periodically.

A daily review to ensure that access for leavers is revoked on terminations date, or request from management, is carried out by the Identity & Access Delivery Team.





We observed that the responsibilities for maintaining and coordinating systems/transactions are maintained through local systems administrators.


We observed that physical environmental controls as described are in operation.


We observed that access levels to systems and applications are set according to the levels of seniority and requirement.


We observed that password protections as described are in place and forced requirements are in place to require changes to passwords.


For a sample of days, we inspected that the Identity & Access Delivery Team carried out the review.



24. IT equipment is maintained in a controlled environment and the maintenance and development of systems, applications and software is authorised, tested approved and implemented.

Process/activityAll SLAL’s core IT Equipment is contained within specialist machine halls and communication rooms which are only available to authorised personnel. SLAL has a well-defined and developed approach and software is managed throughout its lifecycle. SLAL has defined standards for software testing and all new software is introduced via a comprehensive change management system.

SLAL control procedures relating to whether the development of new IT, or changes to existing systems, do not compromise the confidentiality, integrity or availability of client data are considered in SLAL’s annual PICS. The PICS is reviewed by the Board on an annual basis in accordance with the approved Scheme Calendar.

Changes to systems are recorded, including details of testing performed, back out plans, risk levels etc. These changes are submitted and approved by a different individual. SLAL has Change Advisory Boards for each business unit to understand the potential impact of changes and if necessary make changes to their Change schedule. SLAL also has a Global Change Board that has an overview of the complete change schedule.

SLAL’s System Development Life CycleEach stage in the lifecycle requires the previous stages tasks to be completed and signed off as accepted or has action plans before proceeding to the next stage. For a move to production any outstanding actions require an action plan to be included in the change management request.

System Development is analysed by Fortify (a tool designed to highlight any systems vulnerability), all high findings are resolved and medium findings are audited. SLAL’s internal standards are based on ISO27001.

SLAL’s System MaintenanceSLAL’s security patches management process currently pre assesses and tests patches released by vendors, e.g. Microsoft. Alerts on known vulnerabilities are issued to the platform owners through various channels.

A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar on its IT controls. The paper provides the Board with confidence that the controls currently in place are appropriate for Master Trusts and will be provided on an annual basis. The paper will include SLAL’s Physical Security and Environmental Control Statement which refers specifically to environmental controls procedures including power supply, electrical plant and cooling facilities, as well as control testing.




Changes to systems are recorded, including details of testing performed, back out plans, risk levels etc. These changes are submitted and approved by a different individual. System Development is analysed by Fortify (a tool designed to highlight any systems vulnerability), all high findings are resolved and medium findings are audited.SLAL’s internal standards are based on ISO27001.

SLAL’s security patches management process currently pre assesses and tests patches released by vendors, e.g. Microsoft.

SLAL present a paper to the Board on its IT controls including those related to Physical Security and Environmental Control (including change management). This will be reviewed and approved by the Board on an annual basis in accordance with the Scheme Calendar.



We observed that the testing and approval of systems is undertaken independently.


We observed that IT are applying and monitoring patches.


We obtained and inspected the IT Controls Paper, Scheme Calendar and minutes and confirmed that the Board had reviewed the SLAL IT Controls Paper.


5.6 COMMUNICATION AND REPORTING

5.6.1 Communications and Reporting

25. Retirements are managed in accordance with a documented process which is regularly reviewed and approved.

Process/activityThe Board reviewed SLAL’s retirement proposition as part of their induction day in April 2015. The covered:-

• The product solutions offered.

• The investment solutions to support the retirement proposition.

• Member engagement.

• The support provided for members.

In addition the Board received a presentation on SLAL’s retirement proposition at a training event on 12 January 2016, and this subject can form part of an annual “deep dive” training session undertaken by the Board.

There are documented procedures in place within SLAL to manage all retirements. As part of the procedures:-

• Scheme rules and policy provisions are coded within automated systems that have been built and tested to established project management practices.


• Benefits processes have been developed with oversight by Compliance and Legal departments to ensure legislative requirements are met.

• A quality assurance framework is in place to give assurance that benefits are processed in line with the defined processes and service levels.

A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar addressing various aspects of communication. This included SLAL control procedures relating to the retirement process and associated member communications in the lead up to retirement. The paper provides the Board with confidence that the controls currently in place are appropriate for Master Trusts and will be reviewed on an annual basis.


There are documented procedures in place within SLAL to manage all retirements.

SLAL present a paper addressing various aspects of communications administration including matters relating to the retirement process and associated member communications in the lead up to retirement.

We obtained and inspected the retirement procedure documents to confirm in place.


We obtained and inspected the Communications Paper prepared by SLAL, the Scheme Calendar and meeting minutes to confirm that the Board had reviewed the Communications Paper prepared by SLAL.


26. Member communications are accurate, clear and understandable and are produced in accordance with a communications plan. The plan is regularly r eviewed and monitored.

Process/activityThe Board has delegated the production of member engagement communications to SLAL, this is documented in the SLMTC Roles & Responsibilities document which details the specific tasks that take place for the Master Trust, how these are carried out and by whom.

In building a communications plan SLAL sees insight and segmentation as key enablers throughout a member’s journey, up to, through and into retirement. They have commissioned several research projects, including Moments that Matter research to inform the communication programme. This programme uses information known about each member and actions that they have taken to ensure the next automated communication to them is timely and relevant. This was launched with a welcome communication and revamped retirement communications and are now live with the contributions have started communication. These communications will be primarily email or mail if SLAL doesn’t have an email address.

If there are any significant changes to the communications material then these will be reviewed by the Board.

The Annual Benefit Statement is a key communication, which helps members to keep track of their pension.

Last year, in the FCA’s ‘Understanding the financial lives of UK adults’ it states that 2 million UK adults who have a defined contribution pension received and read their annual statement but did not understand it very well or at all.

SLAL redesigned the Annual Benefit Statement, putting feedback and testing at the centre of the design. The aim of the re-invented statement is to make it much easier for members to understand the value of their pension, what they might get back long term and encourage them to take action.


By applying behavioural principles to the statement design, SLAL feels they have made it:-

• Easy to read – focus attention where it matters and reduce ‘clutter’.

• Attractive – clear layout, careful use of graphics, icons and colour to explain narrative.

• Contain a clear narrative – What have I got? How am I doing? What can I do next?

• Prompt next best action – like for example Consolidation or Save more Tomorrow.

The new design, which was issued for the first time in 2018 for Master Trust members, continues to provide members with the key information they require but in an engaging format to encourage positive steps to reaching a good outcome at retirement. Further analysis is required to determine when the new statements could be made available to members with older-style plans including Stanplan A.

The Board have actions on the Scheme Calendar to review a range of communications including member booklet/guide/annual benefit statements and general communication material.

The process for generating all statutory communications is undertaken by SLAL. Individual participating employers have plans in place for communicating to members and the content of specific member communications in the lead up to retirement are set out in detailed wake up pack and logic specification process documentation. As part of SLAL’s processes when producing communications all content is reviewed to ensure accuracy, there is an audit trail to support all communication sign offs.

A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar addressing various aspects of communication to members. This included detail around the drafting and presentation of communications to members. This paper provides the Board with confidence that the controls currently in place are appropriate for Master Trusts, in terms of communicating clearly key messages and will be reviewed on an annual basis.


The Board have actions on the Scheme Calendar to review a range of communications including member booklet/guide/annual benefit statements and general communication material.

SLAL present a paper to the Board addressing various aspects of communications including matters relating to drafting and presentation of communications to members.

We obtained and inspected the Scheme Calendar to confirm there are actions to review a range of communications.





27. Member communications contain information to support the decisions members need to make at retirement.

Process/activityMaster Trust specific communications contain general educational content to support members in making decisions at retirement. As well as this, a suite of interactive tools are available online to help members’ gauge the amount they will need for retirement against their current projected retirement pot.

As members approach their retirement date SLAL provide staged member communications. A “Wake Up Pack” is provided 30 weeks prior to retirement and then a “Follow Up Pack” is issued 10 weeks before the member is due to retire. The aim of these packs is to prompt them to consider how they want to take their benefits.

SLAL offer a range of on-line tools to allow members to:

• Visualise their life in retirement;

• Work out how much their pension is likely to be worth; and

• Set their own financial goals and see what they need to do to get there (e.g. increasing their contributions, change their investment options).

SLAL also offers access to a team of retirement experts that can help members understand their retirement choices to allow them to make an informed decision.

A paper was presented to the Board, by SLAL, in accordance with the approved Scheme Calendar addressing various aspects of communication to members. This included detail around the drafting and presentation of communications to members. This paper provides the Board with confidence that the controls currently in place are appropriate for Master Trusts, in terms of communicating clearly key messages that enable member decision making and will be reviewed on an annual basis.


A “Wake Up Pack” is provided 30 weeks prior to retirement and then a “Follow Up Pack” is issued 10 weeks before the member is due to retire.

SLAL present a paper to the Board addressing various aspects of communications administration including matters relating to information to support retirement decisions.

We obtained and inspected the Wake Up and Follow Up packs to confirm in place.





Appendix – Letter of Engagement

Standard Life – Standard Life DC Master Trust Standard Life Assurance Limited is the provider of the Standard Life DC Master Trust. Standard Life Assurance Limited is registered in Scotland (SC286833) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. Standard Life Assurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. www.standardlife.co.uk

Standard Life Master Trust Co. Ltd is trustee and scheme administrator of the Standard Life DC Master Trust. Standard Life Master Trust Co. Ltd is registered in England and Wales (09497864) at c/o Standard Life Workplace Proposition, 14th Floor, 30 St. Mary Axe, London EC3A 8BF. www.standardlife.co.uk

GENAAF2 0619 © 2019 Standard Life Aberdeen, reproduced under licence. All rights reserved.