PensionsOldie has spoken out in a comment to my blog on trustees being for members not just compliance

The reference to Maggie’s Farm does not refer to Maggie Rodger but to the rubbish workplace that Bob Dylan imagines himself in because there is no one standing up for him!

We can all feel that way when it comes to our pensions and I hope that that will change when Mutuals return and they are run by trustees that are  enthusiastic about what they do.

Well, I try my best to be just like I am
But everybody wants you to be just like them
They say, “Sing while you slave,” and I just get bored

Pension Oldie’s comment

When I first became a Secretary to a Trustee Board in the mid 1980s I was advised that the first key duty of a Trustee was to act in the interest of members, the second key duty was to question and challenge their advisors and not just to rubber stamp advice.  These messages appear to have been lost over the following decades and replaced with a group think mentality and regulations that have embedded a belief that consideration of members’ interests must be solely determined by an analysis of risks.

I strongly belief that it was this false risk dominated approach that has resulted in many DB pensions schemes giving away a third of their assets by adopting an LDI investment policy or buying bulk purchase annuities based on a negative real gilt yield.  What was the real downside risk which these arrangements were promoted as protecting against; when the pricing was based on the assumption that the scheme would if continuing without the LDI or buy-out “protection” would have real investment losses (at say 2% p.a.) in every future year?  Similarly is it currently in the Members’ interest in a scheme in surplus to pay the insurance company premium to buy out liabilities at little more than PPF level benefits?

In Mastertrust DC and CDC do we have, or will have, Trustees who will have the courage of their convictions to sack the asset manager, scheme provider or owner, if they believe it is the members’ interest to do so?

We do need trustees, in both DB, DC, and CDC schemes who are not conditioned by training or experience in the status quo and a fear of deviating from the norm.  Member nominated Trustees are an important protection but we must ensure that Trustee boards are not dominated by those whose training and experience limits their perspective.

Although I have relevant profession qualifications, am paid in the role, and have decades of pension trustee board experience, I refuse to categorise myself as a “professional” trustee.

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