This appeared on my blog yesterday. Here are Kate and Maggie..
My correspondent – Kate – is well known to this blog, she has been in charge of payroll at Marks & Spencer most of her career and now looks after people she made sure were properly paid – many thousands of them over time.
She is saying that when she’s done her time on the M&S Pension Board there may be a job to be done in a master trust (or superfund of multi-employer CDC) which consolidates the workplace pensions of many employers.
As it happens, I hope I am about to work with the first Trustee Director of the Legal & General master trust, the trust that Marks and Sparks used for those auto-enrolled into pension contributions in 2012. He wants to continue the job he started then “finishing the job” with CDC. I use that phrase because it has been recently used by the CEO of TPR and the Pensions Minister. The job that has to be finished involves paying pensions to those who have been saving them.
The other person mentioned in Kate’s comment is “Maggie” who with Kate runs the association of member nominated trustees. Here is the document produced by the AMNT.
Here is the link to it ; the document’s accessible at the bottom of the page
Sole Trustee Code; (for PCSTs)
To make things clear, the Association of Professional Pension Trustees (APPT) do not include member nominated or “lay” trustees. Their goal is for pensions to be governed by a Sole Trustee . Here is a statement from the APPT.
We first announced in October 2020 the publication of a code of practice setting out rigorous new standards for professional trustees carrying out sole trustee appointments.
The code of practice for Professional Corporate Sole Trustees (PCSTs), came into force on 1 January 2021, and set out a range of governance and risk controls that sole trustee firms must adhere to, in order to ensure that scheme members’ interests are properly protected.
These include a requirement for at least two accredited professional trustees to be involved in PCST decision-making processes, as well as new measures to ensure that PCSTs assess whether they should report to The Pensions Regulator if they are removed, or resign, from an appointment as a result of the sponsor company’s actions.
So which way should pension scheme go?
Schemes can either move towards a corporate sole trustee (PCST) and an end game or they can maintain the interests of members as essential, in which case the AMNT is vital to the strategy the scheme adopts.
This comes down to who is taking the risk. If the risk is being shipped off to an insurer through a buy-in and then a buy-out, it seems to make sense to use a corporate trustee to oversee the process of risk transfer.
If a pension scheme is looking to carry on, whether as a sponsor guaranteed defined benefit scheme or a CDC scheme where risks are shared by the members, then a member nominated lay trustee and representatives of members and employers should be on the trustee board.
This is why Pensions Mutual, the CDC scheme we are setting up is not using a Corporate Trustee and why we want members and employers to be represented on this multi-employer scheme.
We will work closely with the AMNT going forward as there is much in the 40 pages of their response to the DWP’s consultation which informs on what we want to do.
The AMNT consultation response
