An increasing area of focus is to assess the effectiveness of the trustee board in its decision-making and the value of the support provided by advisers in that decision-making process. Traditional tools such as questionnaires or annual interviews with individual trustees do not always provide the necessary evidence. Specific issues that clients have been grappling with include:
- too much reliance on a small subset of the trustee board due to knowledge and experience
- trustees who do not have sufficient understanding of technical aspects to be able to engage in and challenge decisions
- meetings not being well run and meeting papers being late or with the wrong level of detail
- advisers who do not provide the right level of support in meetings.
We can provide support in a range of different ways and, as we do not provide wider services to trustees, we can provide a truly objective perspective.
A number of our clients are now using online technology at the end of meetings to evaluate the trustees’ assessment of the decision-making that took place and a trustee’s personal understanding of the issues.
The quality of the advisory support, including papers prepared in advance, can also be rated. Trustees can provide their comments on an anonymous basis, if this will lead to more open feedback.
The output is available in real time and any significant issues can be discussed at the end of the meeting. Trends in this feedback over time can help identify which topics the trustees find most challenging and inform future training needs.
In the news this week, the pensions world continues to be dominated by the impact of the Covid-19 pandemic, with the Regulator publishing more guidance for employers, the FCA delaying the implementation of its drawdown investment pathways and two household name companies deferring (or missing) their deficit recovery contributions.
Over the autumn of 2019, BAC conducted an extensive survey of the actions which companies are taking to manage their defined benefit (DB) and defined contribution (DC) pension arrangements.
2019 marked 50 years since Neil Armstrong walked on the moon and this was obviously on the Queen’s mind in her Christmas message as she talked about a bumpy year but one with small steps of progress as well. In terms of pensions, it also felt like a year of small steps and occasional bumps. In this quarter’s Arena, we take a positive look back at 2019, as well as looking forward to some expected pension developments over 2020.
Despite the very different circumstances facing individual companies, bac‘s autumn 2019 survey reveals a surprisingly consistent picture of the actions which companies are finding most attractive to manage their DB and DC pension arrangements.
As DB liabilities have become legacy issues to be managed, governance has become the umbrella term for a broad range of risk management tools. In this publication, we look at the DB governance solutions we have helped our clients to implement.