Doing the right thing – helping members when they need it most
10th March, 2021
On both a personal level and in my role as a Professional Trustee, I always want to try my hardest, look for how I can better myself and ultimately, do the right thing.
A large part of my role is spent working with the Pension Protection Fund (PPF) and with members of pension schemes whose sponsoring employer has, unfortunately, experienced insolvency. Where this occurs, it can, understandably, be a really unsettling and distressing time for members. Part of my job, and the overall work we do at Dalriada, is to provide comfort to members that we will do all we can to deliver to them the best possible outcome in difficult circumstances. Who would have thought that we’d all be living through a pandemic, where, sadly, a great many people have lost their lives and many more have lost their jobs. At this time, it becomes even more critical to look after basic needs; perhaps this is something we all took for granted a little during better times.
There are, however, steps we can take to improve what we do in an unpredictable and ever-changing world, for the basic financial benefit of our members. We must be forward–thinking and forward-looking to help ensure pension savers receive the benefits to which they are entitled and the required level of service and support when most in need.
Along with my colleagues at Dalriada, I will continue to look at how this can be achieved and what more can be done to enhance outcomes for members, a few of which include:
- Working with the PPF to develop, roll out and promote their Contingency Planning Guidance (found here). This is extremely important in the current environment, and nothing which doesn’t form part of a good scheme governance structure. A lack of contingency planning can result in poor and/or delayed communications to members, the potential for members not being eligible for PPF compensation and pensioners not being paid what they are due. You will note from the Guidance that this doesn’t just apply to pension schemes in distress; there is a level of planning that every scheme can and should do, to cover most, if not all eventualities.
- Adviser invoices – may sound a little odd in the context of enhancing member outcomes, but where there is VAT that can be recovered which results in extra money for the scheme, that has to be a good thing. We have worked with the PPF on a couple of larger schemes to successfully recover significant VAT amounts, increasing the value of the scheme assets. This is of great importance for schemes that are in wind up, where every penny can help towards securing members’ benefits and improved outcomes.
- The new requirements that have been brought in by the CMA also apply to schemes in a PPF assessment period. These can prove to be a little challenging when faced with further costs to ensure compliance; the value that such work brings to the scheme and members however can be questionable. For example, the benefits of carrying out fiduciary manager tenders are really positive when you know your scheme is going to be around to benefit, but how about when you know your scheme has no sponsoring employer, is significantly underfunded and will ultimately transfer to the PPF and be faced with a deadline for completing a review? We’re currently looking at pragmatic ways to ensure that the work we carry out going forward remains proportionate and beneficial to our members.
- We are also sharing ideas with the PPF on what additional risks the COVID–19 pandemic could bring to pension schemes. These include looking at online member facilities, how to ensure money can still be disinvested to meet payroll requirements when some investment managers still require wet ink signatures and even something as simple as ensuring access to documents for all stakeholders.
Innovative thinking and being proactive can really make a difference. What works today may not work this time next year. One thing that won’t change though is our attitude and commitment to doing the right thing.