Buck Bond Group
Let’s use the pandemic experience to improve what we do

Let’s use the pandemic experience to improve what we do

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There haven’t been many upsides to Covid-19, but the pandemic seems to have made many people realise that life has become unnecessary complicated, and we should be prioritising the things that are important.

That is increasingly the case regarding the operation of pension schemes. How many trustees have questioned why meetings are so long or why there is so much detail contained in an actuarial report? It is getting more difficult to see the wood for the trees, and this is being compounded by increasing volumes of guidance and regulation.

However, as we come out of the pandemic (hopefully), we have an opportunity to improve what we do.  With many meetings having been harder to facilitate, we have an opportunity to increase the focus on doing things because they have more purpose and value, rather than just because it ‘has always been done like that.’

The rise of master trusts provides some welcome improvements from economies of scale, particularly in respect of governance, but I think we can go further. There are opportunities to provide more effective – and improved – services by changing the ways they are delivered.

I believe that advisors can be more directive in their advice. Actuarial reports, such as those in relation to valuations and factors, should lead with key information and decisions, and where possible with clear recommendations on how to proceed. I am also of the view that actuarial calculations are becoming unnecessarily complex – immaterially improving accuracy and leading to less trustee understanding. Actuaries should always be conscious of the practical use of the calculations, and that future experience will always differ from actuarial projections.  This also applies to investment advice. A disproportionate amount of time is often spent on day-to-day compliance compared to reviewing the scheme’s overall strategy.

In my view, trustee meetings should be more focused around decision-making, and driving the scheme as quickly and efficiently as possible towards the long-term objectives. Using the long-term journey plan as a template for agendas works well in improving their length and effectiveness.

Finally, trustees and members should take advantage of the technology that is available to them.  Funding applications allow trustees to get an up-to-date view of key information and therefore make faster, better-informed decisions. Member portals should also be available to members so that they understand their benefits and what options are available to them – which is advantageous for members, trustees and sponsors. This should also go hand-in-hand with an effective communication strategy, so that members actually understand the value of the technology they have access to.

In this increasingly complex environment, let’s use the experience of the pandemic to improve the way we work in the future.