We are now moving optimistically into the brighter, warmer weather of the spring and summer, the lockdown slowly lifting. While we all look forward to enjoying the lighter evenings and the re-opening of restaurants and pubs, in the pensions arena there is still a lot of work to be done.

As the lockdown dragged on… (and on), we saw trustees and schemes with work piling up, some of it being deferred, and lots of changes in key team members and resourcing. As we begin to mix the old and the new ways of working, it is essential that the day-to-day running of schemes continues to deliver quality services to members and to support the trustee in achieving their objectives.

Key team members retiring

The pandemic gave everyone pause for thought and many have brought forward their retirements or looked to make long hoped-for career changes. We have seen Pension Managers and key trustee support staff retiring over the past year, leaving some schemes struggling to fill in for key people and the loss of knowledge and history that comes with it.

In many cases, the gap has needed plugging with interim support whilst longer term decisions are taken. On a number of occasions over the past year, we have stepped in to provide that immediate support to trustees and sponsors to help make sure that the scheme is able to continue to deliver its day-to-day activity, drive forward strategy and run effective trustee meetings.

This has often been at short notice and with a ‘baptism of fire’ to get up to speed, familiarise with the schemes ongoing activity and to establish good, collaborative working relationships quickly.

Projects

One of the early trends we saw over the past year, was the decision to defer or delay projects. At the time, we highlighted the need to avoid getting bogged down in the urgent at the expense of those important projects that move the trustee strategy forward or deliver much needed operational change. As we have all settled into remote working, these important projects have regained focus and impetus.

With resourcing challenges being such a common theme, increased project workloads made the issue all the more acute. Several clients have asked us to step in to drive forward discrete project activity collaborating closely with the existing wider pensions team – who have been very grateful for an extra pair of hands.

Meetings and agenda

Remote meetings have become the norm in the Trustee world, but will this continue once face-to-face meetings become a real possibility? Or will we be finding ourselves in a hybrid way of working – some people in the room and others on video?

Experience to date shows that running these types of hybrid meetings can be challenging. It can be manageable where one or two joins virtually but adds complexity where a meeting is split half and half; particularly around technology, but also for the Chair when trying to build consensus or keep discussion moving.

Equally, virtual meetings are efficient; saving travel time for all and allowing advisers to ‘come and go’ easily from meetings, which keeps costs down. We don’t think we will be abandoning our online etiquette just yet.

It hasn’t been unusual to see Trustee agendas more jam-packed than ever and the pandemic came with a steep learning curve as everything was shunted into the virtual world. Evolving this into new ways of working will require careful management.

A lot of the stresses involved can be alleviated through good planning and meeting management, making sure that meetings are focused, the decisions required are clear and that all are singing from the same song-sheet. This has been an area where we have really helped trustees and sponsors settle into the rhythm of virtual scheme management and trustee meetings, establishing ways of working and making sure that meetings are conducted as effectively as possible through the past year.

Our Trustee Executive Services (TES) has helped a number of schemes both before and during the testing times of the pandemic, by acting as an executive extension of the Trustee Board. Our support can help you to keep momentum on projects or drive forward your strategic agenda, as well as benefitting from the lessons learnt from our work across the market.

If you would like to share some wisdom or recognise some of the issues this short Musing raises, do get in touch. Emerging into new ways of working will be on our collective agenda for some time to come.

The hydra-headed impact of Covid-19 on pension schemes has placed strains on the people involved in running them. Many have coped well; it’s often been all hands to the pump. Demanding work all round.

Now ‘the urgent’ work has been dealt with and more time is being spent again on ‘the important’. Which brings us onto people risks, and with the lockdown hopefully easing, making sure we come out stronger.

What’s been your learning from the past year on your own people risks for the scheme? Is there still too much reliance on certain individuals? Issues ahead on succession? Role changes at the Company?

Facing onto an economic environment that’s likely to remain challenging, with the need to advance scheme strategies such as DB derisking and settlement, or an eventual transition to Master Trust for DC, the risks around the people involved with the scheme may increase.

They are also likely to become more obvious to the Trustee and to the Company.

This could be a double-edged sword: on the one hand impacting the capacity to smoothly manage corporate events, journey‑plan projects and workflow peaks whilst scheme ‘BAU’ demands continue to grow; on the other hand shining a spotlight on resource issues, capacity pinch points and the downsides of over-reliance on key individuals. Will they be available? Too conflicted? Able to share the workload?

Backup plans of some form are also needed in the trustee executive/ pensions and the administration teams, for your main adviser leads and other important service providers.

Viewing things through a ‘what if’ lens helps you talk about future scenarios that could be difficult to manage - enabling you to open up discussion about what you can do about it and take some action.

We find independently facilitating a scenario planning session for a client on this works well – it is non‑personalised and encourages people to be open about the challenges and find some solutions. An experienced facilitator can suggest contingencies, options and pitfalls based on experience elsewhere.

What about Trustee and Company role planning? It’s powerful to take a top-down view together. A scheme is typically a significant undertaking; financially and reputationally it is a source of risk to the Company. Good engagement on Trustee and Company role planning will help deliver the strategy. One of the best ways to mitigate strategic risk is to ensure the scheme is well led and resourced properly.

So Trustee skills and succession work needs to be a regular agenda item and a regular engagement item.

There are many levers for the trustee board itself to pull which we have seen work well for clients. For example, using terms of office, MNT selection panels, trustee roles as development earlier in a career, induction before appointment, wider ways to cast the net, bringing in other skills, diversity, technology and well‑placed communications.

Professional or skilled independent trustees, skilled deferred member trustees in portfolio careers, co‑opting for skills on a committee (maybe leading to a trustee role), rotating committee memberships; all are options we have seen can work well and flexibly to reduce risk and over-reliance.

This is part of a Trustee defence plan – like the Company may typically have – for key people and roles.

Doing this type of scenario thinking as a Trustee and discussion with the Company helps current ways of working to be documented and understood, to see where the main risks lie to then mitigate them. When change or the unexpected happens, the impact will be less. Which is a happier ending to Murphy’s law.

So we encourage you to talk about key person risk and plans. Try to spot when you are making assumptions and challenge the thinking. Build in contingency for roles: where someone leaving, not being available or being conflicted would be problematic. And plan ahead for important projects.

The aim is to underpin the Trustee’s ability to bring the scheme strategy through in a timely way. Give skills and succession planning the time it deserves in 2021 and it will pay you dividends when it matters most.