Since the Pensions Regulator (or as we call them ‘our friends in Brighton’) launched its 21st Century Trustee initiative at the beginning of the year there has been plenty of discussion around this important topic. As we start our planning for 2017, one sure thing is that this is not going to go away. Both trustee boards and individual trustees need to consider ‘are we fit for the purpose of running a pension scheme?’
Take the time to carry out an audit
We have consistently said that trustees need to measure how effective they are being. Taking time to consider how the trustee board is working, a gap analysis of trustee skills (not just pension skills), how long it takes to make a decision and building this into a business as usual function, not something which is filed away and never reviewed again is essential. An audit will help identify any potential weaknesses and as importantly the solutions as to how these can be solved. The audit will help in being effective and proactive in directing and supervising the scheme (defined benefit and defined contribution). To do this, trustees have to understand what their roles and responsibilities are and keep them under review. Nothing stands still and certainly not pensions.
Always the elephant in the room, developing and maintaining a trustee training plan is essential for all trustee boards. This is much more than having the base level Trustee Toolkit knowledge. Any training plan has to accommodate the need to get a new trustee up to speed as well as being able to meet the needs of more experienced trustees. Once again a ‘Got, Gap, Get’ analysis will help identify potential training needs.Using advisers training sessions which are usually free is a good source of knowledge as well as meeting fellow trustees who may be grappling with the same issues that you are. Equally, the Pensions Management Institute’s Trustee Group is an inexpensive tool to help trustee training. We have spoken before about the benefits of ‘Just in Time’ training on subjects such as actuarial valuations, trustee report and accounts etc and we believe that any trustee training plan needs to accommodate such learning.
Does the Trustee Board have the right skill set?
Just as for different successful companies, trustee boards which are different can be as successful in running their particular scheme. There is no magic ‘one size fits all’ make up for a trustee board. Whilst pension knowledge is important, don’t overlook the soft skills which all boards need. For example, the ability to collaborate with other scheme stakeholders; a board which has diverse skills and backgrounds can avoid the dreaded ‘group-think’, the ability to recognise potential and real conflicts of interest and come up with a proportionate solution and the ability to develop a practical solution are critical skills for every trustee board. This invariably means the board has trustees who feel confident and supported enough to ask the silly question – which is never silly. It means that someone has not explained themselves sufficiently for a trustee to make a decision.As professional trustees we have worked on these issues for many years and lots of boards of trustees have benefitted from our experience and presence on the board.
People who read this blog also read this blog and these case studies
And there’s more, lots more. To find out more about our views of what a good trustee and a good trustee board can look like please contact us on 0845 4334 199 or email us at email@example.com