"Will no one rid me of these turbulent Member Trustees!"

I've been sent a rather odd and disturbing link to a story here on "Engaged Investor" magazine's website.

In which a pension consultant is quoted as saying he understands that the Government is maybe thinking of getting rid of Member Nominated trustees who sit on Pension scheme Boards???

So who will replace the  representatives of those who actually pay into the pension scheme and act as the owners of their capital? Let me think now? - perchance, more highly paid consultants?

The timing seems most peculiar, since the Government has recently agreed to a significant increase in member nominated representatives (MNR) in the Local Government Pension Scheme and is making promising noises about giving more powers to MNRs in Governance Committees for Contract based pensions schemes and Master trusts. I fully expect the next Labour Government to continue with this process.

I actually support the important role played by professional advisers and consultants in running pension schemes and think many of them are honourable and genuinely want to do the right thing for us. However, there is no getting away from the fact that we have the fiduciary duty to our beneficiaries and they do not.

But as the full article in Engaged Investor makes clear, never forget the reason, why the requirement for member nominated trustees came about in the first place. The picture above is of Bob Maxwell in his famous yacht a year before his death, who stole hundreds of millions of pounds belonging to pensioners.This resulted in legislation that requires at least 1/3 of member trustees make up the Board.

The institution of trusteeship in this country is centuries old and although not perfect is still fit for purpose. Our primary role is to ensure that the money we hold in trust is held for the benefit of the beneficiaries and not be totally ripped off by those who are paid to manage our money. Even Adam Smith (not someone I normally cite on this blog) would have understood this.

In the past some trustees have not been properly trained and supported and have been held back on Boards. The requirement to have member representation and the growth of trustee based organisations such as the TUC Trustee network and especially the Association of Member Nominated Trustees (AMNT) will help counter these problems.  

Anyone who opens a newspaper or who turns on the telly to watch the news, will be aware on practically a daily basis, that we actually need more member trustees and representatives looking after all aspects of our money - not less.

AMNT newsletter October 2012 - meeting review; Fair Pensions invitation; Pensions Regulator message

- Download the reports presented at our last meeting
- Invitation from Fair Pensions during Living Wage Week
- Message to you from the Regulator

Dear member,

Last month’s AMNT members’ meeting was a success, with informative presentations and discussions on the thorny issue of investment management fees.

The meeting began with an overview of recent association activity from the co-chairs, Janice Turner and Barry Parr.


Barry explained how our efforts to sign up sponsors has been progressing well, with a couple of companies already signed up and a few more well on the way. We hope to provide you with full details of these when they are confirmed.

 



We then heard from Janice how the AMNT’s campaign to promote smoothing of DB discount rates was going well, with national press coverage and positive feedback from the pensions minister, Steve Webb.

 

There was then a presentation by Hari Mann of the RSA, who has worked with David Pitt-Watson on an influential report looking at the lack of transparency within investment management charges and how this can be damaging to pension savers.

 

The paper can be downloaded by clicking here, and the RSA’s other publications can be accessed by clicking here. Committee member John Gray’s review of Hari’s talk can be found by clicking here.

 

This was followed by a talk by John Simmonds of CEM Benchmarking. The company undertakes research into investment fees paid by pension schemes. His presentation can by found by clicking here.

 

CEM has offered AMNT members the chance to take part in their ongoing research. Schemes that take part will be entitled to a free personalised report. An example of such a report can be found by clicking here.

 



As an example of the type of information CEM would require, an example survey questionnaire can be found by clicking here. For more information on how to take part, contact John Simmonds by emailing johns@cembenchmarking.com.

Invitation from Fair Pensions

AMNT member Catherine Howarth, who is also chief executive of lobby group Fair Pensions, has sent the following invitation to members:

I would like to invite you to an event during Living Wage Week for pension trustees and other investors in FTSE 100 companies. The event, which is kindly hosted by Aviva Investors and in conjunction with the Living Wage Foundation, will mark 18 months since the launch of a collaborative investor initiative to promote Living Wage standards in the UK’s largest private companies.

The event will be an opportunity to hear from FTSE 100s that have become Living Wage employers as well as from a variety of investors who are supportive of the standards. It will be a chance to learn about the practicalities of implementation and about employer accreditation.

In May 2011, a £13bn coalition of institutional investors wrote jointly to the CEOs of the FTSE 100 inviting them to adopt Living Wage standards across their UK operations. Since then a productive dialogue between companies and their investors has developed on this topic, and a growing number of companies has either made progress towards Living Wage standards or has fully adopted and implemented them.

This event on November 5 will be part of Living Wage Week, which will see a range of events held across the country to celebrate the growing profile and uptake of Living Wage standards as a mark of organisational responsibility. The week begins on Monday morning with an announcement by Mayor Boris Johnson of the new London rate.

I very much hope that you will be able to join us. All members of the AMNT would be very welcome and it would be great to talk about whether you could notify people in the network. Please RSVP to Tom Scott (tom.scott@fairpensions.org.uk).

Pensions Regulator record-keeping message

We have also been contacted by the Pensions Regulator, who have written the following message for members:

In 2010, The Pensions Regulator set specific targets regarding ‘common data’ – such as name, address and date of birth – and gave trustees until the end of 2012 to achieve this.
 
The targets required that of these common data items:
 
- 100% should be in place for member data created after the beginning of June 2010
- 95% should be in place for member data created before June 2010.
 
By now, the regulator expects schemes to have taken significant steps to meet these targets. These steps include measuring their scheme data, and having a corrective plan in place where that data is found to be poor. Scheme administrators are ready to work with trustees on this, and failing to take action may lead to a breach of internal control requirements.
 
More information on record-keeping is available on the regulator’s website, including regulatory guidance, online learning resources and a new checklist for trustees.
 
To learn more about how poor data and record-keeping can impact schemes, join regulator staff in a 45-minute webinar at 11am on Tuesday October 16.
 
Regulatory case and policy leaders Victoria Holmes and Louise Hallard will discuss the risks of poor data as well as what action trustees should take now.  Places on the webinar are limited, so register now to reserve your place.
 
You can get on the regulator’s website by clicking here. You can also register for the webinar by clicking here.

Kind regards, AMNT Committee

AMNT newsletter – July 2012: meeting review; trustee guide discount

Association of Member Nominated Trustees

 Dear member,

Two weeks ago the AMNT hosted its summer members’ meeting with a number of topical discussions and presentations.

The event, which took place at AXA Investment Managers’ London offices in Newgate Street, began with a presentation by co-chairs Barry Parr and Janice Turner on the association’s latest developments.

Copies were distributed of AMNT’s recent submissions to the Dept for Work and Pensions inquiry into occupational pension schemes and to the Red Tape Challenge. We reflected the consensus of  all our meetings and called for DB trustees to be given the option of using smoothing when carrying out our triennial reviews.

DC trustees were updated on the discussions going on within the pensions industry, in which AMNT is participating, on development of a better type of DC scheme.

These included the finalisation of the constitution, an update on the AMNT’s lobbying activities and an insight into the potential sponsorship opportunities the association is in the process of finalising.

Then committee member Owen Walker gave a presentation on the development of the website.

This was followed by AMNT member and chief executive of FairPensions Catherine Howarth giving a presentation on the shareholder spring and how this affects trustees.

FairPensions has produced a briefing on executive pay, which has been designed with busy trustees in mind.

The idea is to make something available which gives trustees some handy questions they can ask fund managers if they want to be sure that a tough line is being taken on executive pay packages.

You can read it here: http://www.fairpensions.org.uk/sites/default/files/uploaded_files/investorresources/ExecutivePay2012.pdf

Members were then given a presentation by an AXA IM spokesperson on how investment companies can also help trustees to improve their shareholder engagement.

The meeting then split into breakout groups, focused on DB and DC issues.

The working group on defined benefit pensions concentrated on discussing a draft produced by DB working group chair John Gray on what to do if your scheme sponsor announces they want to close the scheme.

This draft is at an early stage and John Gray (john.gray@amnt.org) is very keen to hear from you if you have been through this process, regardless of whether the scheme closed or stayed open.

We are now revising the draft guide, carrying out further research and checking and we hope to circulate it to everyone in the near future. If you are interested in contributing to it please contact John.

After the break, members received a presentation by friend of the association and executive director of OPDU Jonathan Bull on the benefits trustees can receive of indemnity insurance.

Jonathan’s presentation can be downloaded by clicking here.

30% discount on trustee guide

The publishers of The Guide for Pension Trustees are offering AMNT members 30% off this publication which is on the reading list for the PMI trustees’ qualifications. The Guide is a practical and comprehensive manual for all pension trustees.

It contains the essential practical, legal and commercial information that trustees need in order to perform their roles efficiently, accurately and lawfully. You will receive free quarterly updates of the guide, reflecting the latest developments in the sector, and you will have free access to the guide online, which includes additional modules and data tables.

It normally costs £265 but the AMNT discount brings this down to £185.50, and all those taking up this offer will also receive a free copy of the Pensions Pocket Book 2012, which normally retails for £47.50. To obtain the discount you have to quote offer code GPTCW110 when you order. Telephone 01235 465 574, fax 01235 46556 or email subscriptions@marston.co.uk.

Ask your fellow MNTs to join us

The meeting was delighted to hear that AMNT has now grown to about 240 members, and we are responsible for pension funds with collective assets of an estimated £200-billion.

The more members we have the stronger our voice will be in putting forward your concerns to the industry, the regulators and the government, so if you could suggest to your fellow MNTs to join us that would really help.

Kind regards, AMNT Committee

(I posted this late so had to take out an invite to a conference that was out of date)

Association of Member Nominated Trustees

Recently I joined the "Association of Member Nominated Trustees".  The AMNT was only launched last year and has already 150 members who serve as trustees or representatives on pension funds with over £50 billion of assets. 

On Wikipedia the AMNT is described as being "composed of pension trustees selected by employees or members of private and public sector pension funds in the United Kingdom. It a non-profit group which seeks to organise employee representatives through sharing information, expertise and coordinating policies for pensions and corporations in which money is invested".

I went to its AGM in March and was very impressed.  In particular I went to a work group on Defined Benefit pension schemes and was pleased to be in a room full of people who were genuinely positive and supportive about DB. I was also the only person from a public sector scheme.  At the meeting it was decided to form a working group defending and promoting DB pensions schemes which I will Chair.

I have always thought that despite the good work of the TUC Pension Trustee network and LAPFF there needs to be some form of national forum for all member nominated trustees and representatives. Our schemes are all different but we all have particular pressures and problems common to all. The founding joint Chairs are Janice Turner, Member Nominated Trustee of the BECTU Staff Retirement Scheme and Barry Parr, Member Nominated Director of the Orange Pension Scheme.

If you are interested in getting more information or becoming a member check out its temporary website here.   The next open meeting will be on 7 July in London.