Five tips to keep your pension plan trustee board effective

Keeping up to date with the shifting landscape of pensions legislation and regulation, whilst managing the increasing risks and governance burden facing your pension plan, represents an ever-increasing workload for Pension Plan Trustees.

At ZEDRA, our long-standing position at the centre of the pensions industry and our expertise, gained over many years and across a variety of industries, gives us insight into what helps keep Trustee Boards effective and efficient.

Here are our top five tips:

Tip 1: Set meeting agendas

Well-crafted agendas allow a logical flow and clear requirements (Decide, Discuss, Note), ensuring that important decisions are made when Trustees are not overloaded with information or suffering cognitive depletion. Try to keep the most critical decisions to the early part of the meeting.

Sending out concise and focused meeting packs well in advance of meetings will help Trustees to prepare. The packs should include clear summary papers that aid in the understanding of the materials and/or the decisions required. The packs should also include concise adviser reports that help to direct Trustees’ pre-meeting preparation, which will allow them more time to focus on the key items.

Tip 2: Use sub-committees

Delegating responsibility to relevant sub-committees ensures complex matters can be dealt with efficiently – and can help shorten lengthy Board meetings. Governance structures with multiple sub-committees tend to work best when clear roles and responsibilities are set out.

For this, we recommend the use of clear Terms of Reference (and reviewing TORs periodically to see if updates are needed) to ensure all parties are aware of the delegations and reporting methods.

Tip 3: Format: decide on face-to-face or virtual meetings

The consensus is that a virtual format works well for shorter meetings (3 hours or less) or for single item agendas. However, when the agenda includes more complex topics that require debate and discussion, face-to-face meetings can often be more beneficial.

Consideration of the most appropriate meeting format can help ensure that the Board tackles agenda issues efficiently.

Care needs to be taken when arranging hybrid meetings, which can be difficult to be inclusive and require strong management from the chair.

Tip 4: Training: Ensure your Board has the necessary skills

The use of skills matrices is a great way to identify any skills gaps. Chairs can then hold discussions with each Trustee creating individualised training plans which meet the needs of the Trustee and Board.

It is good practice to review your Board’s learning needs regularly, perhaps once a year. Trustees whose knowledge is up to date will be able to take decisions more effectively with an understanding of the current pensions landscape. You should keep a record of formal and informal training and can read more about why training is so important here.

Tip 5: Diversity & Inclusion: Make sure your Board represents your membership

Trustees have a legal obligation to act in the best interest of Plan beneficiaries. A good way to achieve this is to ensure that your Board is made up of Trustees who represent your membership.

By widening the pool of candidates for potential Trustees to include those outside of senior management positions, you will enhance diversity and inclusion, and thereby provide the Trustee Board with a relevant mix of people drawn from different parts of the business.

In March 2023, the Pensions Regulator (TPR) published its equality, diversity and inclusion (EDI) guidance for Pension Plans which can help you address any issues.

To increase diversity and inclusion, you should consider how to promote the role of Pension Plan Trustee within your company and Plan membership. For example, improving the processes and the language used around Trustee election or selection exercises to support more diverse applications is a great place to start. This could include newsletter items, interviews with existing trustees, or an in-house seminar on what it means to be a Trustee.

How ZEDRA can help

ZEDRA’s award-winning Pensions team acts as independent professional Trustees to Defined Benefit (DB), Hybrid and Defined Contribution (DC) Pension Plans.

We provide a dedicated and experienced resource to assist Trustee Boards of Pension Trusts to run their Plans efficiently and effectively by ensuring compliant board administration and best practice governance.

We work with Pension Plans of all sizes with assets ranging from £100m to over £45bn to ensure they achieve the highest level of governance for the benefit of their members.

We see how Trustee Boards and their advisers operate in practice, rather than simply on paper.

For more information on how we can support Pension Plan Trustee Boards, contact Judith Codling, Client Services Director or Lauren Branton, Trustee Executive & Project Team Lead.