Friday 15 May 2015

Pension Trustee - me!

It’s been a long time since I have last posted, mainly because I haven’t had many interesting things happen to me, but I have recently been asked to undertake a very interesting role that I wanted to share. Due to various work connections and commitments, I have been asked to be a Trustee for a corporate pension fund (DB and DC schemes) of which I work for the sponsoring employer. Before accepting the role, I wanted to clarify to myself exactly what is involved and the impact this would have on my day job.

The first thing to note is this is a huge responsibility I am about to undertake. ‘Trustees of a pension fund are the people, acting separately from the employer, who hold the assets invested in the scheme for the benefit of the participants’.

There are also different types of trustees such as individual trustee, corporate trustee, member-nominated trustees, employer nominated trustees and independent trustees. I fall in to the first category the individual lay trustee and would be part of the board of trustees.

Trustees play an important role in the proper running of pension schemes. The Pensions Regulator provides you with all the information and training toolkits that you need to be aware of in order for you to become a committed and conscientious trustee. On reading the site, the list of responsibilities is a long are responsible for:

  • Contributions
  • Financial records and requirements
  • Investment
  • Your professional advisers
  • Scheme records
  • Members
  • Registration
  • Scheme return and collecting levy
  • Reporting matters to the regulator
It does make me wonder how I am going to do all this as well as my day job? Plus I am not an expert in all these areas, for example investment, I, and I’m sure most of the trustee board, would need help and advice on that.

I do know that other pension schemes use independent trustees to oversee their schemes as they offer vast experience and knowledge in key areas and can confidently challenge/speak to consultants and have a truly independent viewpoint which sometimes makes it easier to make decisions.

Also, I’ve heard a few stories where peers of mine have run into problems with their employer over conflicts of interest, and the independent trustee has helped to rectify the situation, for example a finance director who is also a trustee had to make decisions regarding deficit funding and employer contributions which led to conflicts of interest with the employer, as such the issue was passed to the independent trustee to tackle.

They are also very good at helping trustee boards to review the governance of the pension scheme. My company apparently uses an independent trustee from BESTrustees, a UK wide firm.

So after considering all the criteria, I now need to think about whether I am going to accept the position of Trustee. Sounds like an interesting challenge, but a lot of work and responsibility as well.

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