Being a trustee of any organisation, fund, group or the like has usually been challenging, and correctly so. Indeed, if it is not, then something may not be right. This is no different for pension trustees as they oversee the investment, regulation, management and distribution of pension assets for the benefit of the members, whether they be active, deferred or annuitants. This trustee role has been in sharp focus in recent years with some high-level UK businesses struggling (and in some cases wriggling!) with their accrued liabilities. More on the requirements of a pension trustee can be found here: https://www.thepensionsregulator.gov.uk/en/trustees/understanding-your-role/roles-and-responsibilities

Pension Trustees have also come into focus over the last few years because of a significant uplift in requests to them for transfers out of defined benefit/ final salary type pension schemes. This has sadly included requests by scammers to transfer out and to some extent the Trustees were powerless to stop the requests and payments out. Thankfully, this changed in November 2021 with new regulations to empower trustees to halt suspicious transfers. The Pensions Regulator (TPR) is very helpful in detailing the changes arising from the Pension Schemes Act 2021 here: https://www.thepensionsregulator.gov.uk/en/media-hub/press-releases/2021-press-releases/new-regulations-empower-trustees-to-halt-suspicious-transfers

In addition to the TPR website, there are some good factsheets available from various actuarial sources and a helpful example from the Cartwright Group may be found here: https://cartwrightbenefits.co.uk/updates/Update_The_Investment_Consultancy_and_Fiduciary_Management_Market_Investigation_Order_2019.pdf

It is clear that the ongoing evaluation of a pension scheme, from its service providers, to its investment management, documentation, decision making to costs, to scheme risk need to be monitored carefully.

A Trustee Toolkit by the TPR can be found here to help: https://www.thepensionsregulator.gov.uk/en/trustees/understanding-your-role/trustee-toolkit

Chapters Financial is not responsible for the content of external website information.

Scheme evolution & changes

One thing is for certain: we all get a year older each year. A pension scheme evolves in line with the age of its members, meaning that the profile of the pension scheme in terms of the age of the membership and their need to draw benefits as the scheme matures is important.

There are many points for the trustees of a pension scheme to understand, consider and manage and the list below is not exhaustive:

  • The current funding position of the scheme and any agreed funding arrangement with the employer, and the quality of the covenant from the employer, is vital for the security of the membership
  • The existing service and investment providers / advisers
  • The current investment model being used by the scheme to meet its obligations, as they are expected to arise and as they change. We are aware that defined benefit transfers out from schemes have been topical of late and this has meant that some schemes have required additional immediate liquidity to meet these requests, selling assets where required
  • The scheme rules, and any agreed amendments, are an excellent starting point to review an existing arrangement

More information can be found here: https://www.thepensionsregulator.gov.uk/en/trustees/investment-and-db-scheme-funding

Our services

We have provided guidance and advice to pension trustees on the investment allocation and management of schemes for over a decade. This advice and guidance tends to be for smaller schemes (up to 100 members). For larger schemes we would refer enquirers on to other providers that may have greater capacity to provide the service that the trustees of larger schemes may require for ongoing servicing of the scheme, along with the needs of the members.

As you will appreciate, we are not actuaries and we do not offer actuarial advice. However, we are able to provide referrals to suitably qualified actuaries where appropriate.

No individual advice is provided during the course of this webpage.