Although trustees are increasingly under public scrutiny, many are appointed with very little understanding of their role. They are expected to contribute effectively to the management of their pension fund – which may run into millions of pounds – often with minimal support and little or no experience of pensions, investment or law. The law does not require training for pension fund trustees, but it is recommended by both the Government and professional advisers, and employers are required to give any trustee who demands training a ‘reasonable’ amount of paid leave.
‘The market for trustee training has grown enormously as a direct result of Robert Maxwell. Demand for trustee training, in the months after his death in 1991, grew dramatically and has held up since then. The Pensions Act has reinforced the demand, but it really was pushed off by Maxwell,’ says Robert Stenlake, a senior consultant at Bacon & Woodrow.
He says people who are appointed trustees want to know what their role is and what is expected of them, and turn to a variety of training courses offered by a number of actuaries, consultants and the National Association of Pension Funds (NAPF).
There is no legal requirement to obtain the Trustee Certificate of Essential Pensions Knowledge offered by the Pensions Management Institute (PMI), but some schemes do require their trustees to sit the exam.
Bacon & Woodrow, along with Watson Wyatt and the NAPF, offer two-day courses designed to help attain the PMI certificate. Bacon & Woodrow charges 800 plus VAT for its two-day course, which is held at Hartsfield Manor in Betchworth and includes accommodation, meals, recommended reading material and mock examinations. It also offers a one-day seminar called Trustees Essentials, which is designed to help newly appointed trustees by providing them with a clear explanation of their responsibilities and how best to carry them out.
The agenda includes the trust deed and rules, trusteeship in practice, conflicts of interest, investment matters – with separate considerations for Defined Benefit (DB) and Defined Contribution (DC) schemes – and liability and indemnity. Several case studies are included and the seminar is held at their London offices at a cost of 260 plus VAT. A one-day basic training course on the issues involved in occupational pension schemes is also offered in London at the same cost.
Similar courses are offered by Sedgwick Noble Lowndes, the employee benefits consultancy, which offers a separate course aimed at newly appointed trustees as well as one aimed at those with more than two years’ experience. Charges are similar, and they also offer a separate one-day course designed specifically to meet the needs of trustees of DC schemes, which have been gaining in popularity with employers.
One of the largest competitors in the trustee training market is Watson Wyatt, which offers two-day courses in Reigate on 10 times a year. It also increasingly arranges client-specific training, where its consultants do a day’s training in-house for a specific company.
‘The demand for this training has gone up quite dramatically in terms of senior people coming on for trustee training. On a course not long ago we had, in the same room, a deputy chairman of a FTSE top-20 company, a female machinist from an engineering factory in Leeds, and a couple of finance accounting clerks. What has changed is the willingness of senior people to attend theme-building, bonding sessions and go and sit in a classroom with someone of a much lesser position,’ says Alan Pickering, head of Watson Wyatt’s trustee training. Pickering is also the unpaid vice-chairman of the NAPF, which has a variety of trustee training courses on different levels held at various venues around the country. These are divided into modules depending on the level of the trustee’s experience. The NAPF’s Module 1, aimed at new trustees, also offers details of the PMI’s Trustee Certificate and how to prepare for the exam.
Clive Gilchrist, of the independent professional trustee London-based organisation BESTrustees, supports the NAPF courses because they have speakers from many different firms and, as such, there is no overt selling. BESTrustees does not itself provide trustee training, as it aims to be completely objective in its executive role acting as trustee to a wide range of pension funds. Trustee training courses are also offered by some of the smaller consultancies on an as-needed basis, and a number of organisations, such as some law firms, provide their own in-house training. Some of the pension magazines also collate useful lists of pension training schemes on offer.