Pension management: extra hands and fresh eyes

Our national Pension Management team has a broad range of experience in the running of pension schemes and can provide tailored support as part of the client’s own team.

The need

A large in-house trustee pension scheme team, who we will refer to as the ‘Pension Executive’ had lost a team member. The Pension Executive was based in London and the sponsor was a large multinational company. The team were very busy on projects and business as usual work supporting the trustee board and a number of committees. The team included investment, communication, risk, accounting and administration specialists. Barnett Waddingham (BW) were already doing an actuarial consulting project for the Pension Executive and, through this existing relationship, were asked whether someone from our Pension Management team could bridge the gap, while the Pension Executive considered the future shape and size of their resource.

Although the role being filled was relatively junior, the head of the Pension Executive also saw this as an opportunity to bring in someone experienced who could observe the way the team worked and perhaps suggest areas where things could be improved.

The BW Pension Management team member most suited to the role was based in Glasgow. She met with the Pension Executive and a three month secondment on site was agreed.

The basic role being covered included:

• arranging Trustee meetings, papers, attendees using the Pension Executive’s electronic board papers package
• collating quarterly and year end returns from trustee directors in relation to corporate hospitality, training, personal share dealing and conflicts
• recommending beneficiaries in relation to discretionary death cases to the Pension Executive person delegated by the trustee to make the decision. Then obtaining Company approval in circumstances where that was required
• managing member cases with the scheme administrator
• user acceptance testing of the scheme’s new member defined contribution projection tool
• creating matters arising logs from meeting minutes.

Our approach

We got to understand the Pension Executive’s systems, governance and ways of working, also taking account of the wider frameworks set out by the sponsor. This was relatively easy to pick up sitting physically with the team though equally, armed with that information, it became possible to work remotely off site on the Pension Executive systems and hardware. We spent three days a week on site and one day in Glasgow. We listened to the members of the Pension Executive, reviewed governance documentation and observed the team working together.

The outcome

At the end of the secondment, we provided or identified the following:

• a need for another overarching governance role in the team. Whilst the specialists in the team were doing all they should be, the pulling together of all the strands and recording of the good work being done could have been improved. For historic reasons this had been defaulting to the Pension Executive Lead but this was neither sustainable nor best use of her time
• an initial draft of a case for putting the role in place
• a draft role description
• a review of key governance policies making sure practice matched the policy and updating one or other as required
• a draft training policy which was adopted by the Board
• a draft conflicts policy and register which were adopted by the Board and obtaining conflict management provisions from advisers
• suggestions on new trustee induction training
• a suggestion that the Pension Executive seek and highlight training and networking opportunities for the trustee directors and themselves
• ideas on how best to capture policy decisions in a way to be easily referenced and reviewed, including a master governance and administration policy log
• a high level planning document template across all committees to make sure items made it on to agendas at the right time and other activities were tracked across all the disciplines
• suggestions on adviser reviews
• enhancements to protections to member information in governance documents e.g. anonymising in minutes
• areas where one of the committees could ‘let go’ some activity already delegated to the Pension Executive to make room for other more strategic discussions at their meeting
• ideas for e-filing structure and ways of working to protect document version control and improve ease of finding material and keeping ‘topics’ in once place

Some of this reinforced the direction of thinking of the Pension Executive Lead but she had just not had the bandwidth to pull her thoughts together. The scheme was participating in a One-to-One supervision program with The Pensions Regulator and they understood what gold standard governance looked like. The work we carried out helped crystalize what needed to be put in place to raise their operations to be the best it could be, lifting the scheme out of the technical details to have in place an overarching, effective and practical governance framework.