Pension Fund Trustees

Debt_Free_Chick

Bossyboots wrote:

My OH was once Chair of Governors at a school on special measures so he has no problem with giving up some of his time and is used to dealing with consultants of various types and personalities.

My only issue is one of protection and so far everything I have seen indicates the potential at the very least, for a huge fine for something going wrong.

Yes ... but the trustees have professional help to help them avoid these situations. They don't act "alone".

I will certainly be getting him to take up Pal's suggestion of asking for a summary of the protections in place.

First question would be "Who is the Secretary to the Trustees?" and then arrange for hubby to have an informal meeting with that person to find out more about the running of the scheme and what the role of a trustee actually involves.

What would be the position if the other trustees agree to do something he disagrees with and it all goes wrong?

Decisions are by majority, although unanimous decisions are favoured i.e. all the trustees agree with the decision. When making decisions, trustees must put aside all personal, moral and any other prejudices. The right decision is generally pretty obvious and will be backed up by advice - which should always be in writing. A good secretary will assemble different advice from the actuary, lawyer, investment adviser etc, prepare a briefing paper for the trustees and possibly "steer" them towards the right decision. The most important thing is for trustees to ask themselves the right question (which the secretary should do in the briefing paper), consider all relevant facts and disregard all irrelevant facts. Provided they do this their decisions can generally not be challenged. And trustees are not expected to forecast the future so a decision that turns out to be wrong years down the line is not necessarily a wrong decision - so long as it was the right decision at the time it was taken.

It is partly because of some of the difficulties encountered when he was involved with the school, that makes me wary now.

Personalities are the most difficult things to deal with, even on a trustee board. But if all the trustees are crystal clear about their overriding obligation - to act in the best interests of the beneficiaries, as a whole - then there should be few problems. Again, I've not had an instance of any real difficulties in more than 25 years of working with pension scheme trustees.

He needs to find out more about the way the scheme operates in his company though. I would be less enthusiastic if there were not a dedicated secretary to the trustees.

Bossyboots

When I said an opportunity to protect his pension, I meant in terms of having input into the running of the scheme and helping steer its direction, rather than looking out for himself and his own pension.

I will find out the name of the consultancy firm being used. The are supposed to be sending some info through.

Hubby has told his company he is not prepared to do it but he will think again if they can't get anyone else. He is their preferred choice so I suspect this will raise its head again.

Dora_the_Explorer_5

I've been a trustee several times and now turn down all invitations to become a trustee because I found that although I had the best interests of the organisations at heart I was too frequently outvoted by the other trustees who hand on heart had best interests at heart but were influenced consciously and suconsciously by their own agendas.
Wouldn't touch it with a bargepole but good luck to Mr B if his offer is taken up. Does he know why he is the 'chosen one' above all the other employees? Has he thought about what his position with his colleagues might be if he is part of a collective decision to do somthing with the pension scheme some of them dislike?

Bossyboots

Dora_the_Explorer wrote:

Does he know why he is the 'chosen one' above all the other employees? Has he thought about what his position with his colleagues might be if he is part of a collective decision to do somthing with the pension scheme some of them dislike?

He was chosen because everyone knows how involved with the school he was and therefore he has some grounding in a steep learning curve and is used to meetings. He also doesn't pull any punches and will say what he thinks. There has already been some dissent about the pension fund so the issue of how people will react is one worth considering but the other employees at the moment would like someone who won't roll over just because the big boss has an opinion. I know he could do the job, and was pleased to be asked but he agrees that it is not worth the risk.

EdInvestor

This Telegraph article gives another example of today's reality - the trustees are very likely now to come into conflict with management.

That's what they should have been doing all along, of course, if they had, perhaps we wouldn't have all those deficits

But the fact is this puts any employee trustee in an impossible position in re his job. To my mind in the new era, trustees will need to be independent outsiders - though as with P&O above, company retirees (and/ or retired union officials) could be part of the answer - kind of like a junior version of a non-executive directorship.

Pal

EdInvestor wrote:

I didn't like to say it, but those actuaries have got to be one of the big downsides of being a trustee

Not being an actuary, I completely agree.