What is a trustee business plan?

Mar 29, 2018

We have been banging on about the importance of the pension scheme trustees having a plan, monitoring, tweaking and making it work. 


According to research by Aon in 2015 less than a third of DB pension trustees had a business plan with SMART (Specific, Measurable, Achievable, Realistic and Time-bound) objectives and a strategic focus for their pension scheme (source: Time to focus on getting things done – Aon, 2016)

A new client asked us ‘what exactly is a trustee business plan?’ It’s an excellent question, and here is the (relatively) short answer:

In summary

For our trustee boards we have a business plan which covers the trustee’s vision and long term goals for the pension scheme. Out of this, the trustees can develop their one to three year strategic objectives. From this, the action plan is developed outlining who does what, how and by when.

This makes life a lot easier for a scheme because it informs everything you do as a Trustee – you don’t need to keep reinventing the wheel working out what to do for the best. It acts as your blueprint for the scheme and all decisions should be made by referring to the plan.

Vision and goals

This is where trustees describe the vision for the scheme and what the long term goals for achieving that vision are. This will vary depending on the scheme’s benefit structure and membership. The vision needs to align with the sponsor’s view otherwise the plan will fail.

Once you have the long term goals, these can be broken down into medium and short term goals. For example – If the sponsor and the trustees agree that ultimately the scheme should be bought out by an insurance company in ten years – that’s the long term goal. The medium term goals would be to achieving certain funding measures at specific times (which will also help in de-risking the investment portfolio) and the short term goals would be the more immediate steps to take to start hitting the funding measures such as getting the right investment advisers in place.

In order for those goals to be achieved, you need to break them down into the objectives.


Following on from 2, this is all about having a business plan to ensure that there is a clear understanding of the purpose and strategy for the scheme, such as a buyout in X years or a measure of self-sufficiency in Y years. The business plan for the scheme needs to underline with that of the scheme sponsor in order to avoid any disconnect come the next round of funding discussions. Once again the latest plan needs to be kept under regular review by the trustees at least annually and certainly following any change in management at the sponsoring company.

Our friends in Brighton have made no secret of their intention to be ‘clearer, quicker and tougher’. We may take issue with them sometimes about exactly how they go about this but we do recognise that there are some schemes out there where the trustees are, if not failing their members, certainly not working as effectively as they need to. Trustees therefore need to be fully engaged with scheme governance. This is not a tick box exercise and treating it as such will undoubtedly end in tears.


If you haven’t already got one establishing a governance structure to achieve long term goals, managing training and development of trustees and board evaluation.


What are the processes and tools you need to have in place to ensure compliance with legal and code requirements at all times?


This could be developing a flight plan (as in the example above – how to get the scheme ready to sell to an insurance company in 10 years’ time), or negotiating contributions with the scheme sponsor.

Risk management

Have you got a risk plan? Identify the risks to the plan/scheme, how likely they are to happen, the impact of them happening and what measures you will put in place to manage or minimise the risk.  These could include, bad investment choices, constant change to the trustee board, being fined by TPR for breach of regulation and so on.

Sponsor relationships

What needs to happen in order to maintain an effective relationship with the scheme sponsor.

Member experience and engagement

This is an area that often gets neglected.  You need to establish a communication and member engagement plan. This will ensure proper communication channels with the members where you inform them and they have the ability to provide feedback to the board.


Create an annual budget. Make sure you understand and document the full running costs of the scheme. Once you have your business plan, it’s vital to monitor and review against it regularly. It should be part of your trustee meetings. As trustees we review the plan at least annually to ensure that it is still fit for purpose.

Do you know how good your scheme governance is?  Why not take our test to find out? 

People that read this blog also read this case study

Wind up of pension scheme

For more information about how we work as trustees why not give us a call on 0845 4334 199 or email us at enquiries@cbcpensionservices.co.uk



Submit a Comment

Your email address will not be published.

Download the pros & cons of using a professional trustee

Download the pros & cons of using a professional trustee

Consent Boxes

You have Successfully Subscribed!