opdu - Can Trustees be Trusted

Bulletin Board

Annual Meeting

I have much pleasure in presenting my review of the year. Last year I referred to opdu's membership growth. I am very pleased to report that the membership of opdu almost doubled during the year and is now approaching 150 member schemes with assets in the region of £100 billion. It clearly reflects the difficult environment in which occupational pension schemes are having to operate and the recognition by sponsoring employers and trustees that there is an increasing tendency in parts of society to resort to litigation.

Market rates for all classes of insurance have risen and the Professional and other Errors & Omissions sector of the indemnity market has particularly been affected. opdu has been able to assist sponsoring employers and trustees handle renewals against a very difficult background. It is an area your Advisory Council will be taking a close interest in when obtaining feed-back from the opdu membership.

The opdu website has proved a great success judging by the number of hits it receives and the enquiries generated by it.

During the year opdu launched its subsidiary Trustee Risk Management Limited, known in short as trm. trm can assist trustees in developing their own approach to pension scheme governance by facilitating, in conjunction with acknowledged experts, trustee risk management forums either on a group basis or specifically tailored for individual schemes. trm can also assist trustees in developing a risk management programme with a series of focused meetings based on casual analysis. This provides trustees with the opportunity to be directly involved in their scheme's own approach to risk management. The service has been established in accordance with opdu's objectives of enhancing standards and encouraging best practice in running pension schemes. It is open to pension schemes in general and is not restricted to opdu members. Two seminars have been held to explain the approach to risk management and a third one is to be held on 27 November. Brian Holden MBE has been appointed Chairman of trm Advisory Service.

Brian spoke at the recent Pension Show on trustee risk management, Jonathan Bull on trustee liability and I gave a trustee's view on the issues which confront trustees in practice. A stand was also taken at the Show which attracted a lot of interest. opdu again took a stand at the NAPF exhibition in Glasgow where it was able to meet up with existing members as well as being able to talk to a number of prospective members. In addition Jonathan has addressed various other forums and trustee meetings opdu has been pleased to continue its sponsorship of Trustee Excellence in the Pensions Management Awards 2003 which was won by the Schneider UK Pension Plan. We were delighted that Malcolm McLean OBE, Chief Executive of Opas won the Oustanding Contribution to the Pensions Industry award - it was very well deserved.

Malcolm has worked tirelessly during these difficult times appearing on television and speaking on phone-in programmes to explain pension issues to the public. He has campaigned on behalf of pension scheme members who have lost their pension rights.

Malcolm must also be delighted at the recent decision of Maersk to support the Sealand Scheme. Well done and many congratulations to Malcolm.

I referred last year to opdu's participation in the Group, under the chairmanship of Brian Holden, which developed and launched The Trustee Code of Practice. The Group met recently to discuss future projects in this area and any updating that may be needed to the Code. I am pleased to report that opdu has agreed to provide administrative support to the Group in its future work.

opdu is also providing meeting facilities and administrative support to the The Pensions Archives project with which I am involved. The idea is to provide archive facilities at a University which will become a recognised centre for the holding of material and documents in relation to the development of pension provision in this Country. The Steering Group is at an advanced stage of selecting a University to work with. You will be hearing more about this project when we launch an appeal for funds! I am very grateful to opdu for its support of the project.

Last year I also made mention of the formation of the Raising Standards of Administration group which opdu supported. In May this year it established itself as a company limited by guarantee and published its first set of Guidance Notes on the company's website (www.rspa.org). Amongst these Guidance Notes are some very comprehensive ones on winding up. I am very pleased to report that Michael Goy of Railways Pension Trustee Company, an opdu member, is the Chairman.

I hope from this review you will see that opdu continues to play an active part in a number of areas within the occupational pensions movement and that it hopes to do so for many years to come.

Before I close I would like to thank Jonathan Bull and his team and my colleagues on the Advisory Council for their involvement in the work of opdu during the year. I would also like to extend our grateful thanks to the partners of Freshfields Bruckhaus Deringer for making available these magnificent facilities this evening for the meeting and the reception that will follow.

Alan Herbert
Chairman of the Advisory Council of the Occupational Defence Union Limited

opdu's annual meetings which are held in the autumn provide an open forum for discussion on issues central to the aims of encouraging the raising of standards in the governance of occupational pension schemes:
for details contact Marcia Adele or Lisa Howard on 020 7204 2530

opdu's 6th Annual Meeting, November 2003, was very well attended with over a hundred people from the pensions sector coming to hear the Chief Executives of Opra and NAPF speak on the future of pension provision and regulation in the UK.

Alan Herbert, the Chairman of opdu's Advisory Council, started proceedings by outlining the continued remarkable growth in membership - see left for the text of his report.

The Chief Executive of Opra, Tony Hobman, gave the audience an insight into how the organisation was trying to move away from overbearing regulation to a more risk-based partnering approach. Opra was also looking at encouraging the use of Codes of Practice, rather than statutory regulations, and launching initiatives to educate trustees. Tony Hobman looked forward to the new Regulator that was due to replace Opra and anticipated a much more flexible approach and wider powers to enable the Regulator to adopt a proportionate approach.

The Chief Executive of the NAPF, Christine Farnish, highlighted the common aims of NAPF and opdu in supporting and promoting the well-managed provision of occupational pension schemes. She focused on funding issues and the likelihood that many more employers would be closing their final salary pensions and replacing them with defined contribution schemes. She also talked about the controversial proposals to introduce a pension fund protection scheme.

Following the speeches, there were about 30 minutes of questions from the floor which made for a lively debate. The vast majority stayed for the reception afterwards and the feedback we received about opdu and the event itself was extremely positive.