Trustee services
With the increasing requirements for Pension Scheme Governance comes additional risk and cost. We are able to help reduce this risk to you. We can provide a dedicated Professional Trustee to fulfil the needs of your board, be that as chair, co-trustee or a sole trustee.
For defined benefit plans, our mission is to work very closely with scheme sponsors and scheme actuaries to ensure that agreed journey plans, whether to buy-out, buy-in or self-sufficiency status are met, and costs are fully controlled going forward. For defined contribution plans we aim to provide the maximum value for money for members through a strong governance regime, and where this may be better achieved through a Master Trust, we help employers transition their plan to this model.
We are fully independent trustees and are therefore happy to work with existing trustees, administrators, actuaries, pension lawyers, investment consultants and auditors. We are however mindful that service and cost are paramount in the effective running of any Scheme, and we will undertake regular assessments of costs and service providers.
Professional Trusteeship
Our professional independent trusteeship service offers specialist support to help trustee boards make informed decisions and deliver robust governance.
The increasing pension scheme governance requirement are more complex than ever which is why pension schemes and companies require support with scheme management, trustee efficiency and technical knowledge. A professional independent pension trustee can support trustee boards with specialist pensions expertise, engage with scheme advisers and manage budgets effectively. To achieve this we work to build strong relationships with co-trustees, the scheme sponsor and the scheme advisers. This not only makes the management of the pension scheme more efficient it also controls costs. Our independent pension trustees will bring a strategic focus to the Trustee Board to agree and deliver an effective strategic business plan to meet the pension scheme objectives.
Chair of Trustees
The role of Chair is recognised as being extremely important to the successful operation of a trustee board. They need to lead the meetings, ensuring the board has the necessary knowledge and skills to create quality debate and effective decision making. The chair’s main purpose has changed over recent years and it is now essential that as a leader of the board, the chair can provide strategic direction for the scheme, take overall responsibility for governance and ensure controls for supervision and monitoring are in place.
Providing leadership, strategic direction and efficient scheme management are just a few of the essential elements of the role and it has been specifically referenced in the latest accreditation requirements for professional trustees.
Sole Trusteeship
There is a growing trend for trustee boards to move to a sole trustee arrangement. A traditional trustee board is a collection of individuals who together act as a trustee board. They will be nominated by the members or employer or be a person or company completely independent of the sponsoring employer who sits alongside the other individuals.
A sole trustee company is not a board of trustees but instead a single independent legal entity acting as the sole trustee. It removes the need for, and difficulty of, finding both member-nominated and employer nominated trustees. This is becoming increasingly difficult and such exercises can be lengthy and expensive with no guarantee that a vacancy will be filled. The need to have a member nominated trustee is removed where an independent trustee company acts as the sole trustee.
Ever-growing complexity of pension issues places significant burdens on the time of lay trustees – there is a training and knowledge (TKU) requirement on all trustees, be they independent, member or employer nominated. An independent sole trustee company is managed by at least two Accredited Professional Pension Trustees who must pass exams and meet continuous professional development standards.
Traditional trustees may find it difficult to agree on matters, causing delays in the decision-making process. Whilst there are some extremely effective trustee boards, there are boards where internal tensions inhibit the decision-making process. This can lead to delays in making decisions which in turn can lead to increased costs and missed opportunities.
For traditional trustees, the trustee meeting can be the only opportunity to make decisions, whereas a sole trustee company will be managing the scheme and making decisions outside of the normal meetings cycle, thus speeding up the decision making process. There is still the need for some formal meetings, but these become more of a strategic forum with the sponsor looking at the long-term strategy of the scheme.
Trustees who are employed by the sponsor, member-nominated or employer-nominated, have an inherent conflict where the individual may be a member of the scheme and making decisions which would affect their own benefit entitlement. Such trustees may also feel conflicted where the scheme is a defined benefit arrangement with a deficit and a negotiation with the sponsor on how it is to meet the deficit is required. A sole trustee company will be completely independent from the sponsor so will not have these same conflicts. A sole trustee company will free up time of existing lay trustees to concentrate on the sponsor's business.
Trustee Standards
Whatever type of trustee appointment you choose we work to the highest professional governance practices. All of our Trustee Directors, take very seriously there duty to remain up-to date on pension legislation and practices and are all accredited with the Association of Professional Pension Trustees, which requires them to do a minimum amount of Continuing Professional Development every year.
A code of practice for Professional Corporate Sole Trustees (PCSTs) was introduced in October 2020 which in summary:
Requires all PCSTs to properly document their appointment
Ensures PCSTs have procedures in place to document how their decisions are taken and recorded
Requires involvement of at least two Accredited Professional Pension Trustees in all key decisions
Requires procedures to be in place to maintain their independence from the sponsoring employer and to remain free of conflicts of interest
Requires Internal Controls set by an independent body to be in place