What do you think about sole trusteeship? A sensible, cost effective way of ensuring a pension scheme is well managed, or an option exposed to pitfalls?
Whatever your opinion may be now, sole trusteeship is becoming more popular each year. Clare Owen’s blog back in 2016 mentions 30% of our new enquiries being for a sole pension trustee. This year, it’s been closer to 50%. Most want a sole trustee now, but one-third are looking to transition from independent trustee board member or chair of pension trustees to a sole trustee after a year or two or three.
An immediate move to sole trusteeship is right for some – take the scheme we took on where the relationship between the trustee board and the pension scheme’s sponsoring employer had broken down. Decisions weren’t being made and risks were neither properly understood and appreciated nor being managed as well as they could/should have been. (Read the case study to find out more!)
For others, a transition to sole trusteeship is a great idea. It gives the existing pension trustees time to get comfortable with their new professional trustee – and, importantly, the independent trustee’s relationship with the pension scheme sponsor – pass on important knowledge about the pension scheme and its members and input their opinions on strategic direction. This helps mitigate some of those often-quoted pitfalls of sole trusteeship.
I shan’t go into all the pros and cons of sole trusteeship here – you can see it all on our video – but I can’t stress enough ‘sole’ doesn’t mean you’re reliant on one person and their views and links to membership aren’t necessarily lost. As a sole trustee to several pension schemes, I’ve seen first-hand how it can be a real benefit to improve efficiency, deliver better scheme management and help move scheme’s along their strategic path more swiftly.
If The Pensions Regulator (TPR) does decide all pension schemes should appoint a professional trustee, I imagine scheme sponsors will move more quickly to sole trusteeship as they seek to maximise value for money. Everyone will then need to become more comfortable with the approach.
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