The trm Report - June 2006

Trustee Risk Management
A Review of Trustees and Trusteeship

Earlier this year Brian Holden MBE was commissioned by Professional Pensions to undertake a review of trustees and trusteeship. Effective trusteeship is at the heart of successful scheme governance and unsurprisingly the review has already attracted substantial interest.

Terms of Reference:

To review the current system and structure of trusteeship, with particular reference to the relevance and role of lay trustees, to examine the range of support available to trustees and to consider the prospect of a workable and sustainable trustee system in the future.

Brian Holden has identified some key issues to be considered which will be at the heart of the review:

• is the role of the trustee and the system of trusteeship really understood?
  
  
• is this system an outmoded 19th Century concept, or is it still a system that can deal with today’s scheme governance issues?
  
  
• does the move from trust-based DB schemes to contract-based DC schemes, or other alternative arrangements, require a broader and lighter regulatory approach?
  
  
• what do scheme beneficiaries expect of their trustees, and are these expectations realistic?
  
  
• is there a ‘best’ framework trustee structure that can be suggested to schemes rather than a prescriptive requirement?
  
  
• has the time arrived to seriously consider some form of payment for lay trustees?
  
  
• is the range of support available to trustees appropriate for modern day pension schemes and is it working?
  
  
• is trustee education and training at the right level for today’s requirements, and is it delivering?
  
  
• against the requirements reinforced by the Pensions Act 2004 and the ongoing debate about “lay trustees”, is the trustee system of governance workable and sustainable?

It is not too late to respond to the review - just complete the review question online.