Talk first, then tender

Topic:

Legal & governance

Date published:

Thursday, 21 December 2017

Author:

Curtis Mitchell

I was with a client recently where we held a specific session at the end of the pension trustees’ meeting to discuss each of the scheme’s advisers. It immediately became apparent that common views were shared amongst the trustees. There were concerns that needed addressing.

The chairman then met with advisers who the pension trustees felt were either underperforming or not delivering value for money to talk about their service. As a result, adviser teams were changed and service shifted from reactive to proactive. The trustee chairman made it clear if service did not improve, a selection exercise would be conducted.

Look for simple, sensible solutions

I like this pragmatic approach. Have the conversations first; don’t jump straight into a full blown adviser review exercise.

For one of the advisers the trustees decided to see what advice the scheme actuary’s firm offered. By getting a trial report from the actuarial consultant, the trustees were able to compare the two approaches at their next meeting.

The session also highlighted how the relationship between the pension trustee board and the scheme sponsor could be improved. A standing agenda item was introduced to allow a representative of the company to attend, by phone if easier, to ensure they are always up to date with what is happening.

That single session at the end of a trustee meeting brought out issues that simply hadn’t come to light in the day-to-day running of the pension scheme. Why not take the time at your next trustee meeting to ask yourself a few simple questions:

• Do we know what is stated in your adviser contracts?
• Are advisers providing the services they should and to the agreed standard?
• Have we already discussed service issues with the adviser?
• When should we review or benchmark our pension scheme advisers?
• What should an adviser review/benchmarking exercise look like?

Your independent trustee (if you have one) or trustee secretary can help with the answers.

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