Peter Askins says it is important to communicate the role of trustee to members in a way they can understand
How often do you get asked the question, "and what do you do?" The usual response to "I'm a professional pension fund trustee" - is "What's that then?" and a blank look.
And that's where it gets difficult: How to describe what a trustee does, professional or otherwise? Our responsibilities and duties are so wide and varied that, to anyone not in the business, trying to explain what we do is nonsense. "SO WHAT", I hear you say. Well if we can't explain what we do, is it any surprise that the public is confused by the whole pensions agenda?
While I accept that people don't need to know the detail of what we do, it is important that we find a way of broadening the understanding and importance of trustees' role in the pensions system as a means of bolstering confidence in the face of almost daily criticism.
People know what an electrician or a plumber does; they don't necessarily know how they do what they do but they understand what is going on. For trustees, their obligations are not easily explained. How meaningful is it to say that a trustee's main concern is to protect the beneficiaries' interest when the beneficiaries of the scheme include the sponsoring employer? Equally, explaining the trustees' governance role is fraught. Everything from administration, to investment to actuarial assumptions and data protection - all fall to the trustee.
The regulator's 21st Century Trusteeship agenda and the consultation on defining the role of the professional and independent trustee is a welcome step in the right direction. That said, it is very inward-looking. There has been a great deal of 'naval gazing' and discussions around who will make use of the information that will flow from the standards being set but there has been little or no thought given to disseminating these significant changes to the wider community.
With the constant flow of negative publicity around financial services and failed employers, the effort going into raising the standards of trustee competence and demonstrating capability is a story worth telling, but how do we do that in a way that members can understand?
As trustees, our communication with members is hemmed in by restrictions on what we can say that might have meaning for a lay person. Our legal advisers and the regulators have drummed into us that we have to avoid giving advice at all costs, which leads to anodyne generalisation.
Turning to the information we have to provide for members, the recent changes to the Pensions SORP has made the annual report and accounts much longer and more confusing. Having said that, how many beneficiaries read them? Summary funding statements tend to contain information relating to a world that existed a year or more ago. The drafts of privacy notices I have seen so far range from five to eight A4 pages and will be unintelligible to lay people. The flows of information in the DC space are even more convoluted and cumbersome.
Effective communication is the key, but in the current climate of recrimination and criticism of so many aspects of our pensions system, it is difficult to see how we can meet the information needs of members without risking exposure to yet more unhelpful and confusing criticism.
I seem to recall a statistic that some eight million people receive an income from non-state pensions, which would indicate that the system is still working at the level of paying people benefits. However, in a modern information savvy society we need to be better at communicating relevant information, and combatting the negative agendas being run by vested interests.
Peter Askins is director of Independent Trustee Services
Have your say: Should trustees be held accountable for the security of data and assets in the event of a cyber attack?
In this week's Pensions Buzz, we want to know if you agree that trustees be held accountable for the security of data and assets in the event of a cyber attack.
More than four in five employers oppose the implementation of multiple pensions dashboards and any that do not include state pensions, the Association of Consulting Actuaries (ACA) says.
Half of scheme representatives agree fiduciary duty hinders trustees in addressing climate change, finds XPS
Half of scheme representatives believe the current fiduciary duty of trustees hinders them in their ability to address climate change, according to a poll by XPS Pensions Group.
PMI president Lesley Alexander and the institute's immediate past-president Lesley Carline talk about the challenges of Covid-19 and the opportunities and challenges the industry faces in the future.
The Pensions Administration Standards Association (PASA) has announced global consultant Deloitte as its expert knowledge provider for data.