I hate saying this but the Trustees of Occupational Pension Schemes really need to move on.
I’m not saying they haven’t got a big job ensuring that the long-tail of Defined Benefit plans isn’t managed through and that the solvency issues they face today aren’t worthy of their outstanding skill sets (these guys are generally the creme de la creme of the workforce).
I am saying that I agree with a friend of mine , an MNT of one of this country’s great DB plans who has written this to me…
So in these changing circumstances what can and should the Trustee do – remembering, as always, that the Trustee’s primary duty is to Fund members? I would argue that there is a moral if not a statutory duty on Trustees of DB schemes closed to new members to at least ask the question about how a sponsor can help new employees plan for their retirement future.
I have written back
I take it you see trustees having an oversite and input to
the company’s reward strategy perhaps morphing into some kind of
benefits committee that ensures staff make use of all the employee
benefits including DC pensions, sharesave, tax wrappers like corporate
ISAs as well as financial education programs pre and at retirement.
My friend, who has spent a lifetime as a trustee has seen right to the core of the matter. Trustees aren’t here just to make sure solvency of legacy promises , they are here to see that employees of companies who care about these things, can leave work or their dependents with properly funded incomes.
Elsewhere he bemoans the distraction of the quick gains of the housing market that led many employees to think they didn’t need their pensions (this in turn led to many companies to think they didn’t need to fund them either). As we know today, not only are these people “housing equity lite” today but they are faced by the grim reality that you”can’t buy a sausage with a brick.
The skills, the committment and the experience of trustees is undoubted. They are a resource that is given for free for the good of all. IF David Cameron‘s Big Society is expressed anywhere it is in the noble behaviour of these people, whether CEOs, shop stewards or ordinary members.
It is time that we re-thought the scope of Trustee’s activities. IF we are serious about employee benefits being part of total reward, we should consider governance of those benefits , as well as the information (and sometimes education) that go with their delivery, as the proper stuff of trusteeship.
- DC Trustees still valued but they need to raise their game (via Henrytapper’s Blog) (henrytapper.com)
- Be aware – IFAs at work! (henrytapper.com)
- Should employers be bothered about their pensioners? (henrytapper.com)
- BA pensioners’ revolt takes off (bbc.co.uk)
- DC Trustees still valued but they need to raise their game (henrytapper.com)
- Accounts and accountability-who pays for NESTCorp? (henrytapper.com)
- The case for doing nothing (henrytapper.com)
- Call for more oversight of contribution schemes (independent.co.uk)
- BA pension scheme chairman ‘unsympathetic’ (telegraph.co.uk)
- Do them a favour – give your older workers a hand! (henrytapper.com)
- Pension scheme trustees suspended (bbc.co.uk)
- The Pensions Board Annual Report 2010 (irishfinancialadviser.wordpress.com)
- Saving For College Using Your Retirement Plans: Rolling Over Retirement Accounts (education.com)