The Brave New World of Defined Contribution Trusteeship
The brave new world of Defined Contribution trusteeship is now upon us, and the nominated Chair of the trustees should have put measures in place to collect the information that he or she will need in order to make their annual statement.
Any scheme with a year ending after 5th July 2015 will have to prepare this statement and issue it alongside the annual report and accounts - in other words, within 7 months of the year end.
The statement must describe the steps taken by the trustees to ensure that the default pension investment fund - which is likely to cover around 80% of the members' funds - remains appropriate.
The charges, both explicit and hidden, must also be commented on. This is a particularly tricky area, as the pensions industry continues to struggle with an effective way in which transaction charges etc, are measured and analysed.
Many trustees will probably seek training in order to get to grips with their new responsibilities, and these training activities should also be commented on in the Chair's statement.
Many trustee boards may feel that these new responsibilities make them feel uncomfortable and exposed. There are two measures that can provide a great deal of comfort, however: getting some professional training, and appointing a professional independent trustee.
Speak to Able Governance to see how we can help.