Overcoming Barriers

Overcoming barriers

Understanding what is happening on the shop floor – A sole trustee company will add pensions experience to a board, but lay trustees offer an understanding of what is happening within the employers’ business. This can be overcome by the sole trustee appointing advisers who understand and are able to assess the employer’s covenant on a regular basis.

Loss of historical scheme information – moving from a trustee board to a completely new sole trustee can result in the loss of historical scheme information. It is therefore important that any sole trustee works with the existing board and advisers to understand the history of the scheme. A consultative committee of former trustees, for a limited period, can assist the transition of the scheme to sole trusteeship.

Member perception – any change in the trustee board needs to be communicated to members. Moving a scheme from a trustee board containing member nominated trustees to a sole independent trustee appointed by the sponsor can, if not communicated properly, cause concern to members, especially as a sole trustee is normally appointed and paid by the sponsor. Questions around the true independence of the sole trustee will be need be addressed. It is important in these situations for the new trustee to have a good communication strategy with members to allay any fears. A sole trustee can offer an annual meeting with members to explain the developments in the scheme during the year and to answer any questions members may have.

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