10 May 2017
Once you have set and articulated the pension strategy which best fits your business it is essential that you have a simple way of monitoring progress against it, and taking action when opportunities arise. Without a monitoring system, the work involved in defining your pension strategy could quickly be wasted.
Clearly what you need to monitor will depend on exactly what pension principles and objectives you have agreed, and what you are working towards. For example, the monitoring which will best fit a target of aiming to buy out with an insurer will differ significantly from a strategy which is focused on another measure such as technical provisions or self-sufficiency.
There is however a suite of options which employers can use for their benefit when analysing progress against their pension strategy – and these include the following:
- Online dashboards can provide daily updates on your pension scheme progression vs expectations. A simple 1-page dashboard covering the key metrics can be simple to produce and very valuable with internal discussions on pensions.
- Regular pension steering group meetings can ensure opportunities are discussed and are not missed. We suggest keeping the meetings quarterly or half-yearly with key individuals, with focused agendas that allow you to discuss the analysis and reporting which best fits their preferred style for pension update meetings (and making decisions).
- Having in place a clearly defined process for decision making when it comes to pensions means opportunities which are linked to market movements (which can come and go very quickly) can be acted on quickly. Companies that are able to benefit therefore tend to be those who have the governance processes in place to be flexible and move immediately.
- Requesting a regular seat at the table for trustee meetings is a quick win. Pension scheme assets are legally the responsibility of scheme trustees – and therefore it is likely you will want and need them onside for any pensions actions which you are proactively wishing to take. The simplest way to keep on the front foot is to ensure you have ongoing communications and dialogue with those whose help you will need.
In part one of our blog series we highlight six reasons why financial directors shouldn't wait to define and implement their pension strategy for 2017 and in part two of our blog series we discuss how to set and articulate your company pension strategy.
Getting your pension strategy in place is the first point of our 6-point plan for managing your pension commitments. Click here to read more