As it looks like the world of remote working will be here for many weeks to come. The question of how to ensure there is a plan in place to maintain the day to day running of your pension scheme is more important than ever. If it isn’t, it risks delaying crucial decision-making processes.

Scheme secretaries have a key role to play in making sure that trustee business runs as normally as it can do in such uncertain times. They are the people that join the dots of pension schemes, being the point of contact for trustees, advisers, sponsoring employers and third-party administrators. So during what is an overwhelming time, how can scheme secretaries make sure that everything runs smoothly?

Virtually there

It’s important that meetings operate as close to reality as they can. A virtual video call is always better than an audio call and it is the next best thing to sitting in a meeting room. This may require some preparation and hand holding, particularly for trustees not familiar with facilities like Skype or Microsoft Teams, but it will be worth it for a far better meeting experience. Reframing meeting agendas so they focus on the key issues will also help to focus minds.

If your trustees haven’t yet made the jump to an online governance system, now is the time to consider this. LCP’s Online Governance System (LOGS) allows users to securely access papers remotely on a variety of devices. If you are already using an online governance system, request that users check their access ahead of meetings. This can save valuable time on the day. If you have a large board, consider a test run of the virtual meeting ahead of the actual meeting. Invite your advisers too.

Have you read the instructions?

Considering the requirements under your rules for a quorum and decision making between meetings is really important. In this fast-moving environment decisions may need to be taken much more quickly than normal. Consider introducing temporary standing instructions or delegations to the trustee chair or a sub-committee. Maybe use this as an opportunity to introduce standing instructions for routine or regular tasks. Consider whether your investment managers or bank still require wet ink signatures. How will you gather these?

The importance of regular communication

The importance of talking shouldn’t be underestimated. For some trustees, contact via their trustee duties might be a great source of reassurance and comfort in uncertain times. Consider sharing trustee and adviser contact details so that everyone can stay in touch (LOGS is a great way to share this information securely). Consider a trustee or scheme WhatsApp group to alert trustees to check other systems when decisions are required.

Are your administrators prepared?

Understanding the business continuity processes of your administrator is incredibly important. Is there a robust working from home policy? Are they able to pay pensions and settle benefits remotely? How is it working in practice? A question for your administrator, which is also applicable for other providers and advisers, is whether they have a reliance on 3rd party suppliers (take a printing house for member communications as an example) and whether their business continuity plans extend to cover these services?

Understanding your scheme’s cashflow needs is also important. Many administrators are requesting larger disinvestments now to cover two - three months of expected benefit payments. It’s decisions like these that might need to be taken more quickly than usual.

Be prepared to reassure your members

These are also uncertain times for the members of your scheme, many of whom will fall into the most vulnerable category and are facing the prospect of a long time in social isolation. Have the administrators seen an increase in member queries, if so, what is concerning members? Would a letter of reassurance be appreciated by your scheme’s pensioner members? Depending on how prepared your administrator is you may prefer that they focus on priority business as usual matters and see this as a secondary consideration. The Pensions Regulator has warned that pension scams activity may increase due to fears around the strength of sponsoring employers. It's worth reviewing your administrator’s existing processes for dealing with pension scams.

Assessing the risk

Now is the time to take a step back and reconsider the risks facing your scheme and take action accordingly.

You can read more about what sort of practical actions schemes should be taking to deal with the volatility caused by Covid-19 in our action plan here.

Lessons learned

It is inevitable that some unexpected issues will crop up in the coming weeks and months. Some parties will find that they are not as well prepared as perhaps you or they might have expected. This is completely normal and we should take the opportunity to learn from these issues (or any potential issues identified) once we return to business as usual.

Treat this experience as a trustee effectiveness exercise and perhaps schedule a session to consider lessons learned later in the year. We would be happy to help you consider your scheme governance or trustee effectiveness further and you can read more about the services we offer here.