The Top Five Assonances for DB Governance:
1. “Remember the member”
Pension schemes are complex. This complexity, however, hides some basic truths. One such truth is that all we should be trying to do is provide security to members when they retire and to their survivors on death. Remember the member. Ask yourself and your advisors “how will this improve the security of the members?”
2. “Rules rule but data is greater”
Trustees should pay the right benefits to the right people at the right time in the right way. The rules tell us what benefits are payable, to whom, when and how. Trustees must act within the rules otherwise they have not derisked. Instead they have hidden a potential cost that may come back in the future. The data tells us about our members, what their benefits are, when and how they should be paid. Trustees must pay all and only their members. If they do otherwise they have hidden a potential cost that may come back in the future. Trustees should ensure that their rules and data are clean, complete, as far as possible unambiguous and that they understand it.
3. “Brisk risk”
Risk management is not about colour coded schedules. It is instead a way of living. It is treated as if a programme on a computer, whereas it should be treated as the operating system. Everything trustees do should be done in the context of measuring and mitigating risk. Trustees should carry out a brisk risk assessment when ever they take a decision or action. They should ask “what are the risks of doing or not doing this?” They should also ask “how can these risks be mitigated?”
4. “Precision decision“
Governance requires decisions to be taken. Trustees are empowered to make decisions. They are also empowered to delegate decision making to others. Trustees should ensure that they have created a structure that allows and encourages decisions to be made at the right time in the right time.
5. “The story for glory”
A good pension scheme will have a strategic objective and a plan for achieving that objective. The plan, like a story, will have a beginning, a middle and an end. The plan should be flexible so as to allow for changes in circumstances or conditions. Trustees should challenge their advisors and measure their own actions in the context of that plan. Are what they are advised to do or the decisions they take consistent with the plan or not. They should ask their advisors “Are you just selling your current product?”
To find out more about our DB Governance Services click here or speak to one of the team by calling 0118 9570 610