As you might have noticed, UK pension schemes are complicated. Trustee boards and employers have a huge amount of work to do, with financial penalties and reputational damage hanging over their heads if they mis-step. At all times, boards must ensure that they concurrently meet their obligations to members, while maintaining compliance with regulatory requirements.
The critical management of the many moving parts of a pension scheme, usually falls to the pensions manager at the employer, and the secretarial and governance provider for the trustee boards, so it is increasingly important to ensure you have the right team in place.
Working with the Board
A fundamental role of the secretarial and governance provider is the effective and efficient management of the trustee board and their meetings. This covers a range of activities from the initial planning and agenda management, to accurate minute taking and completion of actions.
When handled well, these activities should appear seamless, melting into the background of a meeting cycle. allowing trustees to focus on the decisions at hand. However, when things go wrong, be it simple planning issues, or recording complex decisions and actions, it can be costly both financially, and in time for all involved.
It’s like the car starting, or a laptop switching on: we expect these things to simply work, and it causes untold problems when they do not.
But it’s not just meetings. Good governance is key to making sure your scheme is a well-oiled machine, with all the cogs working in unison. This includes: maintaining accurate records; conveying clear communication among trustees and advisers; managing calendars, risk registers, and scheme documentation; ensuring regulatory reporting is precise and timely; and monitoring and progressing the actions assigned to all relevant stakeholders.
Whilst the specifics vary, with DB, DC, and master trust schemes all requiring their own specialist technical support, the fundamental principle remains the same. When it’s done well it should look simple, when it goes wrong it affects everything else.
Secretarial and governance providers can play a key role in easing this burden for trustees and employers, and their support can often expend beyond the ‘routine’ to include help with member nominated trustee reviews, pensions manager transitions, adviser selection and evaluation and trustee board appointments.
Regulations never stop
The regulatory landscape for pension schemes in the UK is evolving at a rapid pace, with new legislation, regulatory updates, and best practice guidelines frequently introduced. It’s a lot to keep on top of to remain compliant in the most efficient way possible and avoid falling foul of financial penalties or reputational damage.
A proactive approach is needed. Teams must stay up-to-date with the latest changes, understanding their implications, and implementing necessary adjustments promptly. Regular training and development for staff can be a key success factor, ensuring all team members have the latest information.
By anticipating regulatory changes and preparing in advance, secretarial and governance teams can mitigate risks and ensure operations run smoothly – with no surprises. Taking proactive action lowers the potential exposure to penalties, and can enhance the management of the scheme, fostering trust and confidence among stakeholders.
What now?
While good secretarial and governance is key to the successful management of a pension scheme, it’s often not prioritised when considering the services of specialist advisers.
It’s common to see secretarial and governance bundled in with administration services as an added extra, or picked up by staff within other adviser firms amid their day job.
Where this is the case, and in particular in those challenging times when a third-party administrator firm is up for a review, this can be the perfect opportunity to consider whether seeking a secretarial and governance provider to partner with would better address your needs.
The right team can make a bigger difference – and make your life a lot easier – than you might expect. If you haven’t already, consider adding a secretarial and governance provider to your adviser review schedule.
