Independent Governance Committees
Regardless of the formal structure of the arrangement, retirement savings schemes all share one thing in common - large amounts of money are accumulated, and someone must be made responsible to ensure that it is looked after correctly.
Where the arrangement is set up by the employer as a trust-based scheme, this responsibility lies with the trustees. The employer must allow at least one third of these trustees to be nominated by the members. This results in a governing body that is aware of the character of the membership, and feels a genuine connection with them.
But with contract-based schemes, such as Stakeholder plans or Group Personal Pension Plans (GPPP); and Mastertrusts, such as the NEST or Now pension schemes, used by many employers for auto enrolment purposes, the governance is conducted at a very high level, with very little connection to the employees on whose behalf they are working.
At Able Governance, we believe that this leaves a 'governance gap' that could undermine the security and value of the retirement savings, and how they are viewed by your employees.
An Independent Governance Committee made up of company-nominated and employee-nominated representatives, and with Able Governance acting as the independent chair, would be the perfect way to fill this governance gap.
The Independent Governance Committee would meet regularly and review important matters such as:
- The controls that are in place to identify and control risks
- The performance of the investment funds
- The service received from the pension provider
- The 'value for money' performance of the scheme
- The communications and engagement with the employees
Having a workplace pension solution is now obligatory. Make sure that the trouble and expense is not wasted as a result of a governance gap - contact Able Governance to discuss the creation of an Independent Governance Committee.