DECIDING to accept a position as a pension trustee is something that comes with a lot of responsibility. But it is also a role that is both rewarding and educational. You will develop skillsets and gain a greater understanding of financial services and different types of investment.
Being selected to become a pension trustee at your company is flattering, but it is not a decision to be taken lightly. If you are wondering whether you should take this on, there are a few key facts that you should be aware of. Here are some of the most important.
What Is A Pension Trustee?
Let’s start with the basics. Most occupational pension schemes in the United Kingdom are set up as trusts because this is how you can make sure that the employer’s assets and finances are kept separate from those of the pension scheme.
This is a legal requirement, and it makes sure that everything is kept safe and secure. A pension trustee is the person (or company in some cases) who keeps the pension scheme assets in the aforementioned trust. The smooth running of the pension scheme and the security of all the benefits belonging to the members are the trustee’s responsibility.
Is There Anything That Would Disqualify Me From Being A Trustee?
If you have any previous criminal convictions that relate to dishonesty or other forms of deception, then you may be disqualified. If you have voluntary agreements with creditors or are currently bankrupt, then you may not be eligible to fulfil these duties. If you have previously been discharged from your duties as a pension trustee or as a company director, then the same applies. You also need to be over 18 years old.
What Are The First Steps I Need To Take?
While some trustees are appointed because they already have all the relevant and requisite knowledge, others are chosen because they are seen to be trustworthy and capable of getting to grips with the task at hand. If you are starting from scratch, then you need to learn the essentials within six months of agreeing to take the role. There are free online toolkits that will give you the skills, understanding and the knowledge that you need to fulfil your duties, and it is a requirement.
What Are The Duties Of A Pension Trustee?
The exact duties of a pension trustee vary depending on the set up and the type of pension scheme that is being used. Many companies have a board of pension trustees to ensure that everything is being conducted properly and that the needs of every member of the scheme are being considered. You have the power to accept contributions, to shape the investment strategy, and to make decisions about admitting members, handling surpluses, and winding up schemes.
As a trustee, one of the most important responsibilities that you will have is making sure that you are acting in accordance with any rules and procedures that are laid out in your trust scheme. You also need to remember that you are acting on behalf of a group of people that may be quite large.
With that in mind, your duties involve acting impartially for the greater good of all of the beneficiaries, while making sure that no one is left behind or treated unfairly by any changes in the scheme. There are measures in place to ensure equality in pension scheme, so finding out what pension trustees need to know about GMP equalisation is important. This ensures that men and women receive equal guaranteed minimum pension benefits, so you need to know how to apply this. You can learn more about GMP equalisation and the best approaches at Procentia. Their software offers world class pension automation with a commitment to excellent customer service.
What Kind Of A Person Makes A Good Trustee?
While having a lot of prior knowledge about how pension schemes work and ideas for potential scheme changes is certainly useful, there are other factors at play when it comes to the elements of a good pension trustee. You need to be confident handling other people’s finances but be able to treat investments as if they were your own. You need to be able to demonstrate why you have made the decisions that you have and be comfortable working with the board to find the best possible solution.
You need to be aware of the potential hazards out there and keep up with security threats, such as the recent rise in cybercrime. You need to be able to seek expert advice when it comes to choosing investment strategies but remember that you cannot delegate your responsibilities. As a trustee, you will be liable for any losses that occur because of decisions you make. This is a role that allows you to help others, but it is a position of real responsibility.
