Atkin trustees, actuaries, consultants & administrators

Remuneration For Lay Trustees

It has been interesting to see the recent articles on the idea of paying lay trustees.  Perhaps unsurprisingly, it seems that the majority of lay trustees favour the idea of being paid. 

The role of the trustee has become more and more complex over recent years and the Pensions Regulator is imposing ever increasing requirements for knowledge and understanding.  The need for trustees to do extra-curricular learning, outside of trustee meetings and more formal training sessions, allied to ever-increasing risks of potential personal liability, is something for which lay trustees should almost certainly, at first sight, be remunerated. 

However, it is worth stepping back for a moment. 

There is a danger that, if trustees are paid then the wrong people will be attracted.  The job of trustee may be seen as a way of earning a few extra pennies rather than the vocation that it has become.

In addition, if lay trustees are paid then they will perhaps have a greater duty of care just because they have been paid.  They will become equivalent to a professional trustee by default.  Wouldn’t it be better, therefore, to accept that the days of the lay trustee are over and that the job should be left to professionals who have built up the necessary knowledge and understanding? 

Lay trustees can become professional trustees if they so wish and there are many examples of where this has happened; and good trustees they are because they have had the desire to pick up the knowledge and skills.

We should, however, accept that things have become so complex that the days of the enthusiastic amateur are over.

We believe that company and member nominated representatives can bring something to the party in terms of helping in the running of schemes.  But do they have to be trustees to do this?  Wouldn’t it be much better to have professional trustees who run schemes and carry the can with an ‘advisory’ committee, made up of company personnel and interested members, to help and assist. 

Members of the committee could attend trustee meetings as observers but would be freed of all the paraphernalia of trusteeship.  They would be there to help the professional trustee, bringing to the party knowledge of the scheme and the views of the members and the sponsoring company.  Trustee meetings would be much the same as trustee meetings at present, although interestingly conflicts of interest fall away because the representatives do not have to wear a sometimes ‘ill fitting’ trustee hat.  At the end of the day, the professional trustee would make independent decisions and ‘carry the can’. 

This must be the way forward!

First published: 04.05.2010

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Thank you. Excellent communication, a rarity in this world of quick communication.

Member, MESL Pension Scheme