As a Trustee of a pension scheme do you find there is never enough time to do everything expected of you? From the scheme sponsor, the members and our friends in Brighton, you try to juggle their competing demands. Given the demands on your time, what can you do about this?
We, at CBC Pension Services, are strong believers in ‘the art of the possible’. As a Trustee this means spending time on stuff with which you can make a difference. You probably find yourself spending time on investment returns, actuarial tables and what’s going to be in the next budget, to name but three, where there can be a lot of conversation and no action (to misquote Elvis).
A far better use of your time, for the benefit of the scheme would be to concentrate on the following:
• Have a robust business plan
Not just going through a box ticking exercise, but making sure the plan has a strategic focus, which has been agreed with the sponsor. And that it has SMART objectives (Specific, Measurable, Achievable, Realistic and Timely objectives). You and your fellow trustees should then spend time on at least an annual basis reviewing the objectives and updating them to reflect changes that have taken place since the last review. If there are monthly check points, these should be discussed at your meetings to ensure you are on target. There’s no point in having a plan without related actions and responsibilities assigned to them.
• Look at the processes for getting items to the Trustee meeting agenda
Do you become frustrated with the time it takes to float an idea, to having a discussion at a meeting, having the topic delegated to a sub-committee and then referred back to the Trustees for further discussion before a decision is made?
Are meetings run inefficiently and is too much time wasted going over old ground and not moving things forwards?
By having a process in place in advance of a meeting, a lot of wasted time can be eliminated.
An easy way to find out is to ask your advisers at least a week before the meeting, so they can prepare and come with clear ideas and solutions. You may need to be firm with the ones who are slow or ill prepared making it clear that their continued appointment does not depend on them giving the ‘right’ answers (the ones they think you want to hear rather than need to hear). Trust us, this sharpens the mind.
Make sure that whoever takes the minutes, accurately records the meeting and that actions and owners are clearly highlighted with timescales for when actions are to be completed.
• Scenario planning for the unexpected
This is linked to your risk management and thinking through the kinds of curve balls that may be thrown your way. Such as the sponsor suggesting a liability management exercise, a buy-in opportunity or change of business owner.
There are lots of others which should be tailored to the specifics of the scheme, but you see the point. It’s probably worth spending some time mind mapping all the different scenarios that may crop up. Do you know for example whether the scheme data is in good enough shape to enable you to get on with the work immediately or will you need to spend time checking with the administrator and resolving issues? And what steps do you need to take to make sure this doesn’t happen time and again?
The outputs of these discussions should be to ensure that you know who has the necessary skill sets and information to feed into the decision making process.
This also enables any gaps to be identified and filled before they become a serious problem and that there are no nasty surprises which need to be sorted out whilst the clock is ticking down.
The result of taking some time to concentrate on ‘the art of the possible’ will then be to have the Trustees make the right decision at the right time.
To us that seems like a worthwhile use of your time and that will benefit the smooth running of your Pension Scheme.
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