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Navigating An Auspicious Regulatory Risk Governance Path To Seal Your Pension Fund ’ s Success  UK Pensions and Investment...
or  It ’ s Just Not Good Enough! UK Pensions and Investments Summit 2011
What ’s the point?
What ’s the point? <ul><li>The old cliché…. </li></ul><ul><ul><li>to pay the right benefits to the right people at the rig...
Good Governance Procedures and  governance tools Conflicts of Interest Knowledge and Understanding Funding  and Investment...
Good Governance <ul><li>Assistance in the form of: </li></ul><ul><ul><li>Advice from professionals </li></ul></ul><ul><ul>...
1. Meetings
1. Meetings -Why is it a problem?  <ul><li>Meetings </li></ul><ul><li>The good trustee boards schedule meetings in advance...
1. Meetings - Proposal <ul><li>Meetings </li></ul><ul><li>The good trustee boards schedule meetings in advance and stick t...
“ Must do” or “You cannot be serious”?
2. Trustee Training
2.Trustee Training -Why is it a problem? <ul><li>Trustee training </li></ul><ul><li>Some trustees are clearly not properly...
2.Trustee Training - Proposal <ul><li>Trustee training </li></ul><ul><li>Some trustees are clearly not properly equipped t...
“ Rolls Royce” or “Robin Reliant”?
3. Conflicts of interest
3. Conflict of interest - Why is it a problem? <ul><li>Conflicts of interest  </li></ul><ul><li>They are to be expected, a...
3.Conflict of Interest - Proposal <ul><li>Conflicts of interest  </li></ul><ul><li>They are to be expected, and can genera...
“ The Ivy” or “McDonalds”?
4. Governance Tools
4. Governance Tools-Why is it a problem?  <ul><li>Governance Tools </li></ul><ul><li>Trustees are left to their own device...
4.Governance Tools - Proposal <ul><li>Governance Tools </li></ul><ul><li>Trustees are left to their own devices and practi...
“ Barcelona” or “Hartlepool United”?
5. Employer Covenant Assessment
5.Employer Covenant - Why is it a problem?  <ul><li>Employer Covenant Assessment </li></ul><ul><li>Practices vary and many...
5. Employer Covenant - Proposal <ul><li>Employer Covenant Assessment </li></ul><ul><li>Practices vary and many trustees ar...
“ Sandbanks” or “Middlesbrough”?
6. Timely Funding Updates
6. Timely Funding Updates- Why is it a problem?  <ul><li>Reacting to Funding Requirements </li></ul><ul><li>Current statut...
6. Timely Funding Updates - Proposal <ul><li>Reacting to Funding Requirements </li></ul><ul><li>Current statutory deadline...
“ Inspired” or “Crackpot”?
7. Member Communication
7. Member communication-Why is it a problem?  <ul><li>Member Communication </li></ul><ul><li>There ’s a great deal happeni...
7. Member Communication - Proposal <ul><li>Member Communication </li></ul><ul><li>There ’s a great deal happening in the p...
“ William Shakespeare” or “Jeffrey Archer”?
8. DC Communication
8. DC Communication - Why is it a problem? <ul><li>DC Communication </li></ul><ul><li>General appreciation and understandi...
8. DC Communication - Proposal <ul><li>DC Communication </li></ul><ul><li>General appreciation and understanding of the DC...
“ Mozart” or “Sex Pistols”?
9. Independent Trustees
9. Independent Trustees- Why is it a problem?  <ul><li>Independent Trustees </li></ul><ul><li>Many trustee boards have too...
9. Independent Trustees- Proposal <ul><li>Independent Trustees </li></ul><ul><li>Many trustee boards have too many potenti...
“ Go for it” or “Non-starter”?
The Top Nine <ul><li>Mandatory meetings </li></ul><ul><li>Mandatory  toolkit </li></ul><ul><li>Ban on Chair, CEO, CFO bein...
Disclaimer <ul><li>The views expressed during this presentation are those of Stephen Mallett and/or Alan Grant and do not ...
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Navigating An Auspicious Regulatory Risk Governance Path To Seal Your Pension Fund’s Success or It’s Just Not Good Enough! - Presenation: Stephen Mallett, Jardine Lloyd Thompson

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For more information contact: emailus@marcusevans.com

Stephen Mallett, Chairman of Trustees, Cobham Pension Scheme & Alan Grant, Regional Director, Jardine Lloyd Thompson delivered his presentation titled "Navigating An Auspicious Regulatory Risk Governance Path To Seal Your Pension Fund’s Success or It’s Just Not Good Enough!" at the UK Pensions and Investments Summit 2011.

Join the 2015 Summit along with leading regional pension investors and global asset managers in an intimate environment for a focused discussion of key new drivers shaping institutional investment strategies today.

For more information contact: emailus@marcusevans.com

Published in: Business, Economy & Finance
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Navigating An Auspicious Regulatory Risk Governance Path To Seal Your Pension Fund’s Success or It’s Just Not Good Enough! - Presenation: Stephen Mallett, Jardine Lloyd Thompson

  1. 1. Navigating An Auspicious Regulatory Risk Governance Path To Seal Your Pension Fund ’ s Success UK Pensions and Investments Summit 2011
  2. 2. or It ’ s Just Not Good Enough! UK Pensions and Investments Summit 2011
  3. 3. What ’s the point?
  4. 4. What ’s the point? <ul><li>The old cliché…. </li></ul><ul><ul><li>to pay the right benefits to the right people at the right time </li></ul></ul><ul><li>Good governance should help efficiently achieve this objective </li></ul>
  5. 5. Good Governance Procedures and governance tools Conflicts of Interest Knowledge and Understanding Funding and Investment Communications Good Governance
  6. 6. Good Governance <ul><li>Assistance in the form of: </li></ul><ul><ul><li>Advice from professionals </li></ul></ul><ul><ul><li>Codes of Practice </li></ul></ul><ul><ul><li>Independent and internal audits </li></ul></ul><ul><ul><li>tPR guidance </li></ul></ul><ul><ul><li>Industry surveys </li></ul></ul>
  7. 7. 1. Meetings
  8. 8. 1. Meetings -Why is it a problem? <ul><li>Meetings </li></ul><ul><li>The good trustee boards schedule meetings in advance and stick to them…..but some meet infrequently </li></ul>
  9. 9. 1. Meetings - Proposal <ul><li>Meetings </li></ul><ul><li>The good trustee boards schedule meetings in advance and stick to them…..but some meet infrequently </li></ul><ul><li>Mandatory meeting requirements based on size of scheme e.g. minimum 4 meetings per annum for schemes with assets of £200m+ </li></ul>
  10. 10. “ Must do” or “You cannot be serious”?
  11. 11. 2. Trustee Training
  12. 12. 2.Trustee Training -Why is it a problem? <ul><li>Trustee training </li></ul><ul><li>Some trustees are clearly not properly equipped to fulfil their duties </li></ul>
  13. 13. 2.Trustee Training - Proposal <ul><li>Trustee training </li></ul><ul><li>Some trustees are clearly not properly equipped to fulfil their duties </li></ul><ul><li>Completion of the Regulator ’s trustee toolkit is mandatory to be able to act as a trustee </li></ul>
  14. 14. “ Rolls Royce” or “Robin Reliant”?
  15. 15. 3. Conflicts of interest
  16. 16. 3. Conflict of interest - Why is it a problem? <ul><li>Conflicts of interest </li></ul><ul><li>They are to be expected, and can generally be managed, but sometimes actual or perceived conflict is not dealt with as robustly as it should </li></ul>
  17. 17. 3.Conflict of Interest - Proposal <ul><li>Conflicts of interest </li></ul><ul><li>They are to be expected, and can generally be managed, but sometimes actual or perceived conflict is not dealt with as robustly as it should </li></ul><ul><li>The Chairman, CEO and CFO should all be prohibited from being an employer-appointed trustee of an occupational pension scheme </li></ul>
  18. 18. “ The Ivy” or “McDonalds”?
  19. 19. 4. Governance Tools
  20. 20. 4. Governance Tools-Why is it a problem? <ul><li>Governance Tools </li></ul><ul><li>Trustees are left to their own devices and practices vary from well organised to extremely poor </li></ul>
  21. 21. 4.Governance Tools - Proposal <ul><li>Governance Tools </li></ul><ul><li>Trustees are left to their own devices and practices vary from well organised to extremely poor </li></ul><ul><li>Mandatory risk register, business plan, review of advisers, register of interests and conflicts </li></ul>
  22. 22. “ Barcelona” or “Hartlepool United”?
  23. 23. 5. Employer Covenant Assessment
  24. 24. 5.Employer Covenant - Why is it a problem? <ul><li>Employer Covenant Assessment </li></ul><ul><li>Practices vary and many trustees are still not sure how far they should go </li></ul>
  25. 25. 5. Employer Covenant - Proposal <ul><li>Employer Covenant Assessment </li></ul><ul><li>Practices vary and many trustees are still not sure how far they should go </li></ul><ul><li>Minimum tests of strength of covenant assessment for DB schemes </li></ul>
  26. 26. “ Sandbanks” or “Middlesbrough”?
  27. 27. 6. Timely Funding Updates
  28. 28. 6. Timely Funding Updates- Why is it a problem? <ul><li>Reacting to Funding Requirements </li></ul><ul><li>Current statutory deadlines are such that by the time agreement is reached the next funding update is due or has already been prepared </li></ul>
  29. 29. 6. Timely Funding Updates - Proposal <ul><li>Reacting to Funding Requirements </li></ul><ul><li>Current statutory deadlines are such that by the time agreement is reached the next funding update is due or has already been prepared </li></ul><ul><li>Valuations and new schedules of contributions should be signed off and implemented within 9 months of the effective date of the valuation </li></ul>
  30. 30. “ Inspired” or “Crackpot”?
  31. 31. 7. Member Communication
  32. 32. 7. Member communication-Why is it a problem? <ul><li>Member Communication </li></ul><ul><li>There ’s a great deal happening in the pensions world but few schemes communicate those issues well and rely on the Summary Funding Statement or annual benefit statement </li></ul>
  33. 33. 7. Member Communication - Proposal <ul><li>Member Communication </li></ul><ul><li>There ’s a great deal happening in the pensions world but few schemes communicate those issues well and rely on the Summary Funding Statement or annual benefit statement </li></ul><ul><li>Mandatory communication with members within 3 months of the accounts being signed off (annual newsletter) </li></ul>
  34. 34. “ William Shakespeare” or “Jeffrey Archer”?
  35. 35. 8. DC Communication
  36. 36. 8. DC Communication - Why is it a problem? <ul><li>DC Communication </li></ul><ul><li>General appreciation and understanding of the DC pension is poor </li></ul>
  37. 37. 8. DC Communication - Proposal <ul><li>DC Communication </li></ul><ul><li>General appreciation and understanding of the DC pension is poor </li></ul><ul><li>Strengthened mandatory communication with DC members re their potential benefits </li></ul>
  38. 38. “ Mozart” or “Sex Pistols”?
  39. 39. 9. Independent Trustees
  40. 40. 9. Independent Trustees- Why is it a problem? <ul><li>Independent Trustees </li></ul><ul><li>Many trustee boards have too many potential conflicts of interest but employers shy away from appointing an independent trustee </li></ul>
  41. 41. 9. Independent Trustees- Proposal <ul><li>Independent Trustees </li></ul><ul><li>Many trustee boards have too many potential conflicts of interest but employers shy away from appointing an independent trustee </li></ul><ul><li>Reduced PPF levy for schemes with independent trustees </li></ul>
  42. 42. “ Go for it” or “Non-starter”?
  43. 43. The Top Nine <ul><li>Mandatory meetings </li></ul><ul><li>Mandatory toolkit </li></ul><ul><li>Ban on Chair, CEO, CFO being ENTs </li></ul><ul><li>Mandatory internal controls documentation </li></ul><ul><li>Core covenant assessment measures </li></ul><ul><li>Shorter valuation timescales </li></ul><ul><li>Annual newsletters </li></ul><ul><li>Clearer communications for DC members </li></ul><ul><li>Incentives for appointing independent trustees </li></ul>
  44. 44. Disclaimer <ul><li>The views expressed during this presentation are those of Stephen Mallett and/or Alan Grant and do not necessarily reflect the views of their employer or colleagues </li></ul>

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