For those of a certain age who remember the television show Mission Impossible and those who saw the Tom Cruise films will remember the scene where the team leader, Mr Phelps, would receive a cassette tape (remember them!) which invariably began ‘’Your mission, should you wish to accept it …’’. The tape would then self-destruct.
Not much similarity with pensions then – or is there?
We have previously beat the drum on the crucial need for Trustees to have a sound business plan August 2014 – ‘If you don’t know where you are going, any road will get you there“ and March 2015 ‘Trustee Boards & Succession Planning’. To create a sound business plan you must first create a sound MISSION STATEMENT.
THE EGG CAME BEFORE THE CHICKEN
A MISSION STATEMENT should be the prequel work before the business plan. The mission statement is essentially the purpose of the Trustee and is best written using the KIS principle ‘Keep it Simple’. A mission statement needs to be realistic about the Trustee and its goals, which should align with the sponsor’s aims. Trustees and sponsor’s need to work backwards from the agreed goal to develop the mission statement, which will form the basis of the business plan. The following are examples derived from our experience of writing MISSION STATEMENTS & BUSINESS PLANS for trustee boards that needs to be included, the text is purely illustrative:
- The pension promise to members – ‘our mission is to provide an excellent cost effective service make benefits secure for our scheme members’
- Employer covenant – ‘Our principal employers covenant is ‘’tending to weak’’ and as such much as though we would like to be hold more return seeking assets, we will not do so until the employer covenant improves’
- Investment risk – ‘we do not hold a fixed position as to the proportion of return seeking and liability matching assets we hold. We will review these on an annual basis following the actuarial review.’
- Operational – ‘to manage our business and investment processes to ensure that they are provided in a cost effective and efficient manner’
You get the picture.
If you have already arrived at the business plan but not through developing a mission statement then perhaps it’s time for a review.
A mission statement gives clarity to the Trustee board and the scheme stakeholders, including the scheme sponsor and the different classes of member.
Time spent in developing a mission statement and as importantly keeping it under review, is time well spent by a Trustee board.
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