Pension provision is an essential and often material issue for employers, and the role of the trustee is becoming increasingly challenging.
This is the case for both on-going defined contribution (DC)/auto-enrolment provision and the management of defined benefit (DB) pension liabilities.
The challenge for employers
DB schemes can present the sponsor with costly and unpredictable cash flow requirements; and increasing levels of legislative and regulatory scrutiny can consume substantial amounts of management time.
Meanwhile, DC pension provision is increasingly being used by employers to meet auto-enrolment responsibilities and provide a key element of employee flexible reward structures. Employers may choose to make provision using fully outsourced contract-based arrangements, for example a DC master trust provider, or hybrid/DC-only trust-based arrangements. Governance requirements over these key employee benefits continue to increase, including the assessment of DC master trust covenant strength, setting up an Independent Governance Committee (IGC) to monitor contract-based providers, or trustee boards for trust based provision
The role of the trustee
The role of the trustee in looking after pension arrangements on behalf of members is also becoming increasingly onerous as governance requirements continue to increase. Competing demands for employers’ free cash coupled with heightened Regulator activity and greater public awareness means negotiating suitable funding plans or agreed DC contribution rates is more pressurised than ever before. Frequent legislative changes add to the complexity of ensuring all statutory duties are met and good governance processes adhered to.
A trusted adviser
This environment of frequently changing legislation and increasing responsibilities means the need for quality support from a trusted adviser is as important as ever. Whilst the range of services needed may be very broad, from compliance requirements to added value advice, the best value arises from quality pro-active advice that works in partnership with other providers and supports the trustee/employer or IGC’s governance responsibilities.
How we can help
We provide award-winning pension scheme assurance and advisory services to trustees, outsourced service providers, and employers, in relation to both DB and DC arrangements. We work collaboratively with all stakeholders, tailoring our services to their circumstances, drawing from a full range of in-house UK based experts with huge experience in the sector.
We act for more than 600 UK schemes, of which 52 have assets in excess of £1 billion. These schemes encompass a wide spectrum of scheme size/complexity, benefit structures, sponsors’ status, financial strength, in-house and outsourced scheme management, and associated advisers. We work closely with both The Pensions Regulator (TPR) and the Pension Protection Fund (PPF), giving us detailed insight into how these key bodies operate.
We author the Industry Audit & Accounting Guide for Pension Schemes and the Pensions Digest. The firm is also a member of the Pensions and Lifetime Savings Association, Business Support provider to the Pensions Research Accountants Group, and many of our team are affiliate members of the Pensions Management Institute. We also participate in working parties hosted by organisations such as the Employer Covenant Working Group (ECWG) and the Institute and Faculty of Actuaries (IFoA). This gives us a deep understanding of emerging issues in the sector and contribute to the development of new regulation and guidance.
We look forward to applying our experience and expertise to help you find innovative solutions that support your governance over, and provision of, pension schemes.
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