Defined Benefit Trustee

At Able Governance we have extensive experience in the role of independent trustee of defined benefit pension schemes.

This covers many of the issues that can affect a scheme, such as:

  • Changes in scheme benefit structure
  • Mergers of several schemes as part of a consolidation exercise
  • Negotiations with employers where changes of principal employer is required
  • Principal employer distress and PPF negotiations
  • Scheme de-risking exercises such as enhanced transfer value exercises or pension increase exchange
  • Routine negotiations with the sponsoring employer during the valuation cycle
  • Disputes with members
  • Scheme closure
  • Scheme wind up

Contact us to discuss how we could help your trustee board deal with the challenges that they are facing.

All of the trustee responsibilities described in the Trusteeship section apply to defined benefit schemes (such as final salary schemes or CARE schemes), but with additional complexity.

This is due to the fact that the scheme is generally reliant on the continued support of the sponsoring employer or employers. This reliance is referred to as the 'employer covenant' - its willingness and ability to continue to make contributions to the scheme in order to fully fund the scheme benefits.

If anything threatens to undermine the employer covenant the trustees have a duty to act in order to safeguard the interests of the members. This could result in additional contributions being paid to the scheme or additional security being achieved by other means, such as taking a charge over company assets, or a parent company guarantee.

In these situations, some of the trustees could find that they face a conflict of interest. This is usually as a result of being an officer of the sponsoring company as well as being a trustee. Clearly, it is difficult to take part in negotiations when this dual responsibility pulls in opposite directions.

Able Governance has extensive experience in helping boards of trustees negotiate these tricky issues, bringing in a truly independent position, as well as having valuable experience of similar situations.

This previous experience means that the amount of expensive training and professional support that the trustees need can be significantly reduced, due to our ability to 'interpret' the technical 'pensions speak' of the advisers into language that non-pensions professionals can understand, and with a better understanding of what an acceptable outcome looks like.

Have a look at the case studies to see how Able Governance can help trustees to deal with potentially difficult and contentious issues, such as corporate restructuring, scheme merger and winding up pension schemes.