What attributes are necessary for the successful delivery of independent trustee services?

Filed under: Finance

When deciding whom to employ to deliver independent trustee services, pension schemes should seek candidates with the following attributes.

Experience: One of the major assets offered by independent trustees is experience. The majority of independent trustees have experience of working with several schemes, and are fully aware of pension laws and legislation. As each individual will have experience of working on different schemes, it is a good idea for a board to research the background of the candidate and decide whether their previous experience is relevant. Perhaps they specialise in smaller schemes, for example, or scheme closures. Drawing up a clearly defined selection criteria will help the board to match a candidate to their pension scheme based on the previous experience and skills that he/she has to offer.

Knowledge and expertise are a huge part of what an independent trustee will bring to the table. Typically, independent trustees enter the profession after working within a related area such as law, pensions, economics or accounting. Ideally, the candidate will have skill in all of these areas and will understand all aspects of the scheme’s requirements. As anyone can technically call themselves an independent trustee, it is certainly worth checking what relevant qualifications are held by an individual before they are appointed.

Leadership and guidance skills: Being able to explain complex issues to lay trustees is a crucial part of an independent trustee’s role. A qualified professional should be able to aid in the decision making process by weighing up the pros and cons of each possible option and describing exactly what it means. An independent trustee needs to be fully conversant with the schemes documents, and as an impartial party should act in the best interest of the scheme without bias. When acting as a sole trustee, it is particularly important that the individual or firm’s knowledge, skills and experience are suitable for an executive roll, as they will take sole charge of the schemes assets and decisions.

Conflict resolution skills: Where conflicts are predicted or have already arisen within a scheme, independent trustee offer conflict resolution. Because the trustee is completely independent and has no relationship to the employer, when acting as sole trustee they eradicate any suspicion that the board are being unduly influenced by the employer (or employees). Many trustee firms conduct peer reviews which further ensure that independent trustees are acting in a completely objective way.