Most trustees sitting on pension scheme boards will be seeking the best outcomes for their members and having an increased level of knowledge and expertise available to them by having a professional trustee on their board surely helps achieve this.
I couldn’t agree more that there should be a required level of competence and experience for trustees paid to perform a professional service – we have a higher duty of care and should be delivering higher standards of governance and greater strategic outlook. So, accreditation for professional trustees as a concept makes perfect sense.
What do I think about the proposed accreditation framework?
Well, as ever, the devil is in the detail. The Association of Professional Pension Trustees (APPT) is using the Pensions Management Institute (PMI) as an educational partner with the PMI Award in Trusteeship as the basic qualification. Does passing this necessarily make someone a good trustee? Personally, I don’t think so.
Many people operating as professional trustees already hold APMI or FPMI from the PMI or another relevant qualification and undertake annual CPD. Will making already qualified people sit a more basic test really get us anywhere? I suppose it will create a level in the field and make it easy for those looking to appoint a professional trustee to filter candidates, which may be helpful.
As it seems that other professional qualifications will not be recognised, this will not help trustee boards looking for specialists (who may not hold the PMI Award in Trusteeship). The testing of soft skills (education, comprehension and clarity) in future years has potential to be a real positive. Working across several clients it is clear different boards are looking for different traits in their professional trustee, but clear and effective communication is a must. Overall, I hope proper emphasis is given to higher qualification levels and greater experience in selection exercises otherwise we are at risk of levelling down.
The Fit and Proper Trustee test could be an interesting part. How high will the bar be set to register and how high should it be set for passing? This could be used as a barrier to entry. It could also be used to exclude trustees lacking the requisite knowledge to carry on in their present role. How will this be policed going forward?
For most professional trustees the new accreditation framework will be nothing to fear. I expect most professional corporate trustees already have the appropriate governance structures and written policies in place and undergo AAF audits so they won’t have any difficulties becoming ‘accredited firms’. It may be much tougher for professional trustees who work individually though.
Continuing a direction of travel
All this sits in a backdrop of the 21st century trusteeship. Although not aimed at them, I wonder if lay trustees will view this as another reason not to put themselves forward for pension trustee roles? It feels like this a step towards a professional trustee sitting on all pension scheme boards.
There are still lots of questions about how the accreditation will manifest itself in practice and the timescale for implementation, especially in connection with chair and sole trustee roles. A move towards higher standards is a good thing – I’d just like us to be going further sooner!
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