Employers faced with choosing an independent trustee have quite a difficult job. There is no recognised qualification for independent trustees or any self-governing profession.
- offshoots of legal firms – some of these employ only lawyers, other have become much more broadly based businesses
- “franchised” businesses – often employing trustee representatives on a part-time basis because they are semi-retired or following a portfolio career
- specialist trustee firms – tending to come from a financial background with actuarial and administration skills to the fore
The first thing an employer needs to determine is what the role actually is likely to entail. At one extreme, an independent trustee might be brought onto a board of trustees to add balance and experience and fulfil an essentially non-executive role.
At the other extreme, for an SME with difficulties meeting any level of pension contributions and where no employees are willing to act as trustees, the situation requires a much more hands-on involved executive role.
Many trustees who would be entirely comfortable acting as non-executive trustees would run a mile before managing the detail of a PPF assessment period after an employer had become insolvent.
Could the requirement change in time? – this points very much towards the use of a trustee firm with a broad base of skills which actually operates as a team rather than on a franchised basis.
In further posts, I will cover other issues employers should consider, including experience and skills, external certification, systems and processes, professional indemnity insurance, costs and the independent trustee register published by the Pensions Regulator