As we say hello to 2016, Lesley Titcombe the chief executive at the Pensions Regulator has been writing, among other things, about the open debate about what a 21st century trustee should look like.
In a few hundred words there is not space to go into academic detail about our views about pension trusteeship in the 21st century. This then is our high level view of the world from the perspective as a professional trustee:
Whilst professional knowledge and understanding are a given, our view is that proactive behaviour by trustees is essential. The role of a trustee is immensely more complex than it has ever been. The days of the most interesting part of the meeting was discussing ill health pension applications (as I was once told by a long standing trustee) are long gone.
We have said before that trustees need to behave as company directors. In our view this means being effective and proactive in directing and supervising the scheme (defined benefit and defined contribution). To do this, trustees have to understand what their roles and responsibilities are and keep them under review. Nothing stands still and certainly not pensions.
Always the elephant in the room, professional trustees expertise should be a given. The trick with all learning is how you apply it to the situation you are facing. The Trustee Toolkit has effectively become the baseline level of knowledge for trustees. The important lesson is that to be able to wave a certificate is not, on its own, enough. There is a growing awareness that ‘Just in Time’ training, that is training on stuff when you actually need to know about a subject before making a decision, is an effective way of operating as a Trustee Board.
Governance is in grave danger of becoming a cottage industry of box ticking exercises. In reality, governance should be about working effectively and efficiently. Fundamental to this is having, and as importantly monitoring a plan in place for the scheme which reflects the sponsor’s view of the future. If the sponsor is looking to buy out when they are within cheque writing distance of doing so, the trustees should be thinking about data and matching assets to liabilities. Whilst surprises cannot be entirely avoided, trustees should have contingency plans in place to deal with known risks. A good example is if a trustees were to leave the Board for whatever reason, is the mechanism in to replace them current? Have any parts of the organisation joined or left the group? Is the trustee job description up to date? Delegating such responsibilities to a small committee is often the best way of ensuring such events are considered and procedures developed and maintained.
And there’s more, lots more. To find out more about our views of how a 21st century trustee can work cost effectively for your scheme please contact us by telephoning 0845 4334 199 or email us at firstname.lastname@example.org