Why use a professional pension trustee?
There are clear times at which an occupational pension scheme or sponsoring employer should consider appointing an independent pension trustee.
They include when:
- there is a gap in your pension trustee board’s knowledge or experience that needs filling - particular expertise may be needed in, for example, pension investment, buy-outs , pension scheme governance, scheme wind up etc
- additional support is needed to deal with legislative or regulatory requirements, such as creating and maintaining an integrated funding and risk management plan
- demonstrating you have independent expertise on your trustee board would be beneficial for relationships with pension members and other key stakeholders
Alternatively, you may find yourself in one of these five common situations that have led clients to appoint an independent trustee from PSIT:
- Conflicts of interest – this is often an issue for employer-nominated pension trustees during pension scheme funding and recovery plan negotiations, or during a corporate deal that might impact the strength of the employer covenant.
- Fundamental change to the pension scheme benefits - a typical example is when the sponsoring employer wants to close a pension scheme to future accrual, as it is important the company does not have undue influence on the pension trustees’ decisions.
- Poor adviser performance - when the sponsoring employer or pension trustees feel they are not receiving the best service or advice, or when your pension scheme costs appear to be spiraling out of control.
- At or following a formal actuarial valuation - when a pension investment review is about to start, familiarity with asset and liability studies and knowledge of the wide range of investment options available to pension schemes becomes crucial.
- Insufficient time – for many pension schemes, especially those closed to future accrual, existing trustees often simply don’t have enough time or the motivation to deal with the legacy arrangement. Appointing PSIT as sole trustee removes the burden and responsibility for managing the pension scheme from them.
If you would like to talk through how we can help with your pension scheme, please contact us.