Question – Will we ever see the like of 2016 ever again?
Answer – The ‘never say never’ is probably the politicians’ answer, but in a year where mainstream politicians have been widely ignored by the electorate, pensions continue to be in the news for all the wrong reasons. Tata Steel and BHS have been the lead stories but there have been many others schemes which have not hit the headlines.
What, if anything, has changed for pension trustees? In some ways, not much at all. We still have to follow the Trust Deed and Rules that govern the scheme, we still need to make sure the right members get the right benefits at the right time and we still have to balance members and scheme sponsors interests.
The impact of the Pension Scheme Bill
There have however been some significant shifts in what is increasingly expected from Trustees. The Pension Schemes Bill currently progressing through Parliament looks like it will have a major impact for trustees who sit on the boards of Master Trusts. New terms such as ‘scheme funder’ and ‘scheme strategist’ need to be fully understood and the responsibilities they owe to Trustees. The ‘fit and proper’ test for Trustees is nothing new but the requirement to approve the business plan for the Master Trust is new and potentially ground breaking. No doubt we will hear more about this as the Bill moves from the Lords to the Commons.
Increased level of scrutiny for trustees of defined benefit pension schemes
In the defined benefit trustee world, the level of scrutiny under which trustees find themselves has increased yet again with:
- Press reporting
- The Pensions Regulator
all looking on with a critical eye.
BHS and Tata are examples of where scheme stakeholders have each been pointing fingers at each other and saying ‘it’s not my fault’. Meanwhile members have continued to endure uncertainty about their jobs and pensions when worrying about one, rather than both of these issues, is more than enough.
More professional trustee behaviour required
The drive to more professional trustee’s behaviour shows no sign of slowing down. There is also a growing trend towards sole trusteeship for pension schemes which have been closed to new members and are on the road to wind up. We will talk some more about this in 2017.
Some things sadly stay the same. Pension liberation scams have continued and we hope that the proposed ban on cold calling members becomes law and soon. If losing your job is not bad enough, losing your pension is tragic.
So let’s not forget any of this as we prepare for the Christmas and New Year holidays and resolve to think about how we will face the challenges which 2017 will undoubtedly bring.
If you’d like to
- know more about the Pension Scheme Bill and what changes you may need to make or
- you’d like to understand what increased scrutiny looks like and how to prepare for it or
- know what ‘professional trustee’ behaviour is expected and how it will be measured
contact us on 0845 4334 199 or email us at firstname.lastname@example.org
Have a great Christmas and we very much look forward to catching up with you in 2017