Five experts give their predictions for the biggest issues facing trustees in 2016
Barry Parr, founding co-chair at the Association of Member-Nominated Trustees (AMNT)
A trustee since 1993, Parr was an MNT for the Orange DC scheme from 2007 to 2011 and for the Colt DB scheme since 2012. He is also a Trustee of The Pensions Trust – a Master Trust serving multiple employers in the third sector. Barry holds a Certificate in Pension Trusteeship and is a member of the TPR DC Practitioners Committee.
Prediction: All pension schemes who have £1bn or more in assets under management will be expected to have made an appraisal of their portfolio’s carbon footprint by the end of 2017.
This will lead to other activities:
- How should a portfolio be measured?
- What should a scheme do with the results (re: publication and comparison)?
- What actions (reduction targets, etc.) may then be prompted once an appraisal has been made?
Kevin LeGrand, president at Pensions Management Institute
Kevin has worked in the pensions industry focusing on technical issues for over 35 years. Kevin qualified as an associate of the PMI in 1987 and was admitted to fellowship in 1995. He has been a member of the PMI’s Council for five years, and is currently chair of the membership committee. Kevin has served on the council of the Society of Pension Consultants since 1997 and was president from 2010 to 2012.
Prediction: A Safe Harbour Statutory Indemnity will be introduced to address the issue of offering Guidance versus Advice.
A safe harbour statutory indemnity will be created so that companies can help members get the best out of their retirement planning without fear of straying from guidance into advice.
This will help the job of trustees because it will ensure that people are getting the very best out of their pension scheme. While pensions freedoms now offer the ability to do what you choose with your pension, people are understandably cautious about proceeding without the proper direction needed; however, more often than not the cost of advice is not economic versus DC pots.
At the same time people like the idea of guidance but its inherent flaw is that it is generic and may not always produce the answers people need, especially when they can’t be sure that they are even asking the right questions.
Therefore, we believe that a middle ground is urgently needed, that can be offered in the spirit of helping people get to the right place and this will be made possible through the creation of a safe harbour statutory indemnity.
We believe that in order for the industry to be able to act with the best interests of the member/pension saver at heart that the Government will need to put this on its agenda in 2016.
Ian Neale, director at Aries Insight
Ian Neale is a Director and co-founder of the pensions legislation specialists Aries Insight. He has over 25 years’ experience of serving the pensions industry in a mission to help administrators and others make sense of the legislation. The Aries Pensions System explains all the requirements, not only of UK pensions law, but covering a range of overseas regimes as well.
Prediction: Pension Wise and the Money Advice Service will be combined and re-launched as a ‘National Financial Service.
If this happens, and is implemented properly, scheme members will be much better informed, and probably more engaged with pension saving. This could reduce the incidence of complaints – always costly to handle – and transfer requests as members value what they’ve got.
Margaret Snowdon OBE, chair at PASA
Margaret is a director of JLT Employee Benefits, and chairs the Research & Development Group, driving innovation and thought leadership. She is chairman of the monitoring board on incentive exercises and chairman of the Pensions Administration Standards Association, both promoting higher standards of operation and governance in the industry.
She chairs the industry group set up by the pensions minister that developed the Combating Pension Scams Code of Practice. For five years running, Margaret has been named as one of the Top 50 Influential People in Pensions and was awarded for her outstanding contribution to the pensions industry by the PMI in 2012.
In 2013 she was listed as one of the Top 100 Women in Finance and in July 2014 was named Pensions Personality of the Year.
Prediction: I expect to see a significant increase in trustee training and trustee focus on the quality of administration services during 2016.
Monica Cope, chief operating officer at Veratta Limited
Monica is responsible for operational excellence and service delivery at Veratta. She has considerable experience in the pensions industry, having played key roles in administration, actuarial and consulting disciplines.
Monica is an ISO27001 Lead Implementer and an ISO27001 Lead Auditor, having successfully assessed, managed and guided information security management systems for a number of firms.
Prediction: 2016 will reshape perceptions of information security, data protection and fraud in the pensions industry.
As more organisations hit the headlines for cyber security breaches in 2015, cyber security must be at the forefront of every scheme’s considerations for 2016. Cyber risk, coupled with the European General Data Protection Regulation (GDPR) reforms unifying data protection within the European Union, will make 2016 a massive year for data protection, and the year to make a cyber security transformation.