“I found the trustee training really beneficial, highly recommended. I am not a trustee, I represent the employer and I think it will be valuable for me in future, having a better understanding of the trustees' perspective.”
“They are very proactive and full of new ideas, they've brought better scheduling and better minute sets.”
“PSGS was chosen because of their knowledge of the subject and awareness of our particular schemes.”
“Many organisations and people provide the services that clients need. In my opinion, the differentiator is in the way those services are provided and to that extent, Kathy embodies the qualities that I have come to value from PSITL. Kathy is organised but not fussy; diligent but not dogmatic; persistent without being pushy and compliant in a pragmatic way. Whilst she takes ownership and drives issues forward, Kathy is a team player who uses her and her colleagues experience to provide services to her trustee client whilst working closely with those like me representing the sponsoring employer. She works collaboratively with advisers but constructively challenges the scope of services, fees and service standards whenever necessary and makes sure that member needs are always taken into account. I enjoy working with her and trust that she will deliver what is required by the trustee and the members they represent in a manner satisfactory to the sponsoring employer. ”
“In my experience, not all professional trustees are able to cope with tricky or potentially confrontational situations. I find PSGS has massive experience in getting involved, earning the respect of others and resolving such issues. They get stuck in – they are a first rate team.”
“Very professional and engaged service.”
OK, so we all know pension trustees have a responsibility to provide benefits to their pension scheme’s beneficiaries to be in line with the Trust Deed and Rules and to exercise discretions available to them as necessary. Trustees also have a responsibility to make sure those benefits are provided at a reasonable cost - given they pick up the tab of paying for them, defined benefit (DB) pension scheme sponsors would say this is key!
But how do you draw the line or make decisions on cost versus benefit, especially when that benefit is environmental?
We’re hearing more and more about responsible investing. It is an area that is growing and is certainly something pension trustees should explore. It can provide great value for pension schemes but, by the same token, investments shouldn’t be made purely on their green credentials.
I recently saw an article about a union suggesting members push for changes in their pension schemes investments - in particular pressurising them to divest from carbon related investments. Whilst this could be seen as a noble action - after all, climate change is high on the agenda for a lot of countries and politicians - I don’t agree with members pushing pension trustees to make different investments.
The article suggested as members contributed to the scheme it was their money that was being put into these carbon investments. The concern I have is this does not take into account the fact the employer would have to pick up the cost of funding any deficit if the non-carbon investment provided a lower return than the carbon investment. In my opinion, companies should not have to fund this additional cost if this is not something they agree to.
So, what’s the solution?
There’s never a one size fits all model that can be applied. If a more socially responsible investment strategy is something pension trustees wish to explore, this should be considered at a high level. The risk/reward characteristics need to fit within the overall investment strategy for the scheme.
If a solution can be found that fits with the scheme sponsor’s values and they’re happy to fund the difference (if any), then responsible investments should be seriously considered. What we shouldn’t be doing is encouraging members to pressurise pension trustees without recognising the dialogue also involves the sponsoring employer.