How the Scheme is run
The Trustee has the overall responsibility for running (governing) the Scheme, in accordance with the rules of the Scheme and pensions legislation. The Trustee has a legal duty to run the Scheme in the best interests of all the members, so that the benefits to which members are entitled can be paid. The Pension Scheme Executive looks after the day-to-day management of the Scheme on behalf of the Trustee.
To run the Scheme, each Trustee Director needs to have a sufficient level of knowledge and understanding of both the Scheme and the wider world of pensions. They take part in regular formal training sessions throughout the year, and also attend pension industry seminars and conferences to help them keep their knowledge up to date.
Trustee Directors are not expected to be experts. Instead they can call on the services of their professional advisers, for example the Scheme Actuary and the investment consultants. However, they are expected to be sufficiently knowledgeable to understand the issues and so to challenge their advisors where necessary.
Administering the Scheme
The day-to-day administration of the Scheme is carried out by the Scheme’s administrators on behalf of the Trustee. The Trustee ensures that the administrators have in place adequate processes to ensure that the core financial transactions relating to the Scheme are processed promptly and accurately. This includes investing the contributions, as well as member activities such as investment switches and transfers in and out of the Scheme. It also includes making sure that the benefits paid out to members are paid out correctly and on time.
The administrators report to the Trustee Board at each Board meeting on the activities that have taken place since the previous Board meeting. The administrators also disclose the percentage of transactions that were dealt with within the timescales agreed with the Trustee and set out in the Service Level Agreement.
Monitoring the investments
Keeping a close eye on the investments is crucial to good governance.
The Statement of Investment Principles (SIP) sets out, in detail, the Trustee’s approach to investment. The SIP is reviewed regularly, at least every year, and updated following any changes to the investment process, member demographics or relevant legislation.
The performance of the investments is reviewed at each Trustee meeting.
The Trustee also reviews, regularly, the funding position of the Scheme to make sure it can meet the benefits due members with DB benefits. Every three years the Scheme Actuary undertakes a detailed valuation of the Scheme for the Trustee. This allows the Trustee to see in detail the funding position and decide what action, if any, is needed to improve the position. Between valuation years the Scheme Actuary provides an annual update for the Trustees. Quarterly updates are also provided at each Trustee meeting.
Keeping the members up to date
Membership of the Scheme is a valuable benefit. The Trustee wants members to understand and appreciate the benefits offered by the Scheme, and to be confident that the Scheme is run in the best interests of all members. The key Scheme documents are all readily available in the information centre section of futurefocus, for anyone to read and download. These include the latest Annual Report and Accounts, the Statement of Investment Principles, and various member guides and leaflets.
The Stewardship Report is a detailed report on the management of the Scheme over the past year.
Finally the Trustee also publishes a newsletter, Pensions Focus, at least once a year, to spotlight current issues that may be of interest and importance to members.