The role of the pensions trustee is important and requires responsibility, commitment and time on the part of the individuals appointed. If you’re becoming a trustee, you’ll need to make yourself familiar with the administrative and legal requirements of the role – in addition to being able to handle the pressures and challenges it brings.
Pension trustees may want – or even be required – to undergo training to prepare for the legal and regulatory details of their scheme. Trustee training isn’t a one-off, as the law and the pensions landscape changes, trustees are expected to adapt constantly – education and knowledge is the best strategy for anticipating problems and governing a scheme safely.
Pension trustees who do not fulfil their obligations may be subject to fines – but there are plenty of resources available for anyone searching for ways to overcome the problems associated with the role. Having capable and knowledgeable trustees in charge of a pension scheme is in everyone’s interests – especially the employer, who can only stand to benefit from happy and prosperous employees.
Trustees: Key Duties
Deeds, rules and regulations: the trust deed is the most important document in the trustee-pension relationship. The deed, along with relevant pension regulation outline powers and the rules you must follow.
Prudence, responsibility, honesty: given the importance of the position and the potential for influence over the financial future of scheme members, it is vital that trustees are honest and prudent in their financial dealings. This includes taking financial advice, and considering every circumstance when making investment or savings decisions with scheme funds.
Best interests: as a trustee, you should always work in the best interest of the scheme beneficiaries. This may lead to disagreements with some sections of the scheme membership – but a trustee must consider the needs of every member.
Impartiality: the pressures trustees are put under in their capacity as scheme managers, makes impartiality a vital characteristic. This means acting without bias in all financial dealings and being able to weigh the needs of groups of beneficiaries against others while considering the overall effect on the scheme.
What do trustees do?
The pension trustee is, in a day-to-day sense, responsible for fulfilling the administrative needs of a pension scheme: filing paperwork, paying bills and communicating with other professional bodies. The tasks might include tax payments or maintaining an inventory of assets and liabilities.
Trustees must also make financial decisions, choosing how, where and when to invest a pension scheme’s funds. In your duty to act in the best interests of employees, you must consider the risk of certain opportunities over others and the potential for financial gain – avoiding loss wherever possible.
The financial and administrative responsibility of pension trustees extends to dealings with scheme members. In addition to understanding when and how pensions are to be paid out, the trustee must be able to communicate clearly and in detail with beneficiaries, both providing information and advice and providing details on topics such as annuity rates or the effects of government pension legislation.
The ability of the trustee to communicate with beneficiaries is a crucial part of the job. When pension schemes face difficulties – or are forced to wind up – a capable and impartial board of trustees can make all the difference in resolving the situation swiftly and successfully.
The preceding was a guest post
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