Case study

Your pension scheme is run inefficiently

The client

A US owned company with a pension deficit of c£150m

The problem

Trustee Governance

The Trustee Board had gone through considerable change in the last few years, with new directors and a change of ownership. The committees and the terms of reference for these committees had not kept up with these changes.

The impact of this was that Board meetings became longer and longer and board papers bigger and bigger as more items of ever greater depth were dealt with by the full Board, rather than at Committee level.

As a result the Board did not operate as effectively as it needed and wanted to, since it spent too much time and energy dealing with operational rather than strategic scheme issues.

The solution

CBC put together a plan to review the way the Board worked and this included:

  • Developing a journey plan in conjunction with the company with agreed triggers and signposts for specific de-risking events to take place automatically
  • Updating the terms of reference of the committees in conjunction with the Scheme lawyers and agreeing changes. An example of this was widening the remit of the Investment Committee to the Assets & Liabilities Committee. This more properly reflected the responsibilities of the Committee to understand how these interact with each other
  • Developing a revised Conflicts of Interests policy to enable particularly company appointed directors to continue as Trustees as well as enabling them to continue to do their day job
  • Creating a new Committee with the specific remit to review scheme governance and scheme operations. This included audit and administration as well as reviewing the governance strategy and tools such as the risk register and the internal dispute resolution procedure

The outcome

There is now time set aside by the Trustee Board to review its effectiveness. The success was down to being able to ensure that the Scheme governance remains relevant to the Trustee Board while at the same time not becoming a tick box exercise.

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