Case study

Scheme Secretariat

The client

A UK based company with over 3000 employees and a defined benefit pension fund with assets in excess of £200m.

The problem

Scheme Secretariat

The investment sub-committee met quarterly and reviewed both of its bond managers every six months. Papers for the meeting were distributed six working days before the meeting by the CBC secretary in order that the trustees had a week to read, reflect and raise any questions in advance of the meeting.

One of the managers was constantly late in delivering their reports which meant that these were not included in the meeting papers and had to be tabled separately without sufficient time for trustee review, which inevitably posed a risk to the funds under their management.

The solution

CBC were asked to act as an independent mediator between the Chair and the investment manager to initiate discussion and to reaffirm the roles and responsibilities. This included reviewing and agreeing service standards which were not included in the original Investment Management Agreement (IMA). A clause stating that if the meeting papers including the investment performance numbers were not sent to us on time the investment manager would not attend the meeting was agreed.

Following discussion with the Chair, it was agreed that a friendly yet firm letter would sent to the investment manager confirming the revised terms of the IMA and spelling out the implications of the late delivery of the investment reports.

The outcome

Since the revised terms of the IMA have been in place, investment reports have been delivered on time.

The working relationship with the manager has improved because the trustee now perceives they are being treated in a professional manner by the bond manager and discussions with the manager can concentrate on investment performance not service issues.

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