Writing minutes may at times feel like a time consuming and low priority task in today’s busy pensions world. However, the consequences of not taking proper minutes can be significantly more time consuming in the long run and, if things go wrong, potentially costly as well as reputationally damaging.

I recall a scenario where the ambiguous and imprecise drafting of meeting minutes resulted in conflicting arguments over the level of benefits to be awarded, leading to a significant funding impact depending on the outcome. Indeed guidance issued by the Institute of Chartered Secretaries and Administrators (“ICSA”), while not pensions-specific, notes that taking and writing up minutes is an often under-valued task, despite the minutes themselves being increasingly subject to external scrutiny and potentially being disclosable in legal proceedings.

In recent times we have seen Court cases where the decision-making processes of pension scheme trustees have been scrutinised, and the minutes analysed in great detail by lawyers and the Court as the only contemporaneous record of the decision-making process.

 

Taking accurate and effective minutes is a critical part of good governance and good administrative practice. An accurate and impartial record of what has been discussed and decided at a meeting will serve as a record of decisions and agreed actions. This can prove vital in the event of a query or dispute arising many months or years down the line. It is best practice to have a precise account in writing, approved by those present at the meeting, as opposed to ambiguous drafting or, worse still, silence.

So how can trustees and scheme secretaries ensure effective minute writing? This article considers the legal background to minute writing, including the Pensions Ombudsman’s most recent view as to the level of detail that ought to be included in pension scheme meeting minutes concerning difficult discretionary decisions, together with top tips for writing effective minutes.

There is no one-size-fits-all approach when it comes to minute taking for pension schemes. While the law itself is not heavily prescriptive, the Pensions Act 1995 and accompanying Scheme Administration Regulations 1996 do require trustees to keep written records of their meetings. Briefly, the law requires such minutes to contain the following information:

It is worth noting that the minimum retention period for keeping minutes is six years. However, in view of the long-term nature of pension schemes and the potential for trustees and advisers to need to revisit historic copies of minutes for a variety of reasons, it is highly advisable to retain them indefinitely (or at least for the life of the pension scheme).

For completeness, trustee companies will in addition be subject to the requirements of company law and their own articles of association as regards record-keeping.

Preparation is key for effective minute taking.  To produce a meaningful and accurate record of the meeting, the minute taker should take time to read the trustee papers and familiarise themselves in advance with any jargon or terminology that will be used during the meeting. This will aid in understanding the issues and following the flow of the discussion. Likewise, it is helpful to have a file to hand containing the relevant pension scheme documents, together with any specialist presentations that may have been circulated in advance. 

During the meeting itself, the minute taker will need to take a note of any arrivals and departures, conflicts of interest, and breaks and interruptions in addition to the actual content of the discussion.  Therefore, it is vital that the minute taker knows the names and roles of all the attendees at the meeting and which advisers/ individuals are speaking on which topics. All of this demonstrates the importance of pre-meeting preparation.  

Taking minutes while actively participating in a discussion can prove challenging. It is vital that the minute taker has the confidence to seek clarification if he or she is unclear as to the outcome of any discussions or the final decision reached. 

One of the most important, and often complex, parts of minute taking is knowing how much detail to include when minuting Trustee decisions. Trustee decisions will often attract the most scrutiny including, in particular, when exercising a discretion that affects an individual member. This is particularly relevant for pension schemes when it comes to decisions such as whether to award an ill health pension or how to pay a death benefit under the Rules.

While it is clear that minutes should not be a verbatim record or a transcript, it is important for them to document enough information for the reader to understand why a particular decision has been taken. 

Traditionally, the UK courts have held that the beneficiaries of a trust do not have the right to see the documents which record the discretionary decision-making process and reasons for arriving at a particular decision. However, the Pensions Ombudsman’s general stance is at odds with that view, noting in recent determinations that, although not a breach of the law, trustees’ failure to give reasons for their decision can amount to maladministration and that as a matter of good administrative practice, trustees should provide affected members (and other interested parties) with reasons for their decisions. 

Indeed, in a couple of very recent determinations the Pensions Ombudsman has gone even further. The Ombudsman has ruled that minutes which simply recite the factors taken into consideration without setting out the rationale for why that led to the Trustees reaching a particular decision were not good enough. The Ombudsman expects individuals affected by a decision to be able to understand the rationale for the decision. The Ombudsman has said that documented reasons need to be sufficient to convey an understanding of the weight given to the various factors and why certain elements have been preferred or discounted. It is not enough to say that you took everything into account.

This seems to represent a shift in the Pensions Ombudsman’s views, effectively putting the onus on trustees to document the links between the factors they have taken into account and the eventual decision reached.  The Pensions Ombudsman seems less likely to simply accept post-challenge rationalisation or articulation of the reasons as to why a particular decision was reached if the minutes themselves are silent on the point. As a practical matter, trustees should therefore ensure that meeting minutes sufficiently record the rationale of a particular decision being reached particularly in complex cases where the risk of challenge is greater.

As stated above, there is no one-size-fits-all when it comes to writing minutes. Style and the level of information that is recorded in minutes will vary between trustee boards and between different types of decision made by trustees themselves (for example, discretionary vs non-discretionary decisions, as detailed above).

It is all too tempting to delay writing up the minutes after a meeting has concluded, viewing it as a low priority task. However, the reality is that it should be done as soon as possible when the issues are still fresh in all the attendees’ minds. Guidance from ICSA suggests that writing up the minutes may take at least as long as the length of the meeting itself, or possibly even twice as long, which highlights the importance of the task. 

It is good practice to circulate a draft to advisers and any other third parties who attended and spoke at the meeting to ensure that what has been documented accurately reflects their own understanding and recollection of what was said or advised.

Lastly, the finalised minutes should be circulated to all attendees and signed off (usually by the chairman) as a truthful and accurate record of what happened at the meeting. This is particularly important to ensure that actions are picked up and carried out. The action points themselves should set out what needs to be actioned, whose responsibility it is, and any date by which it needs to be completed. Indeed, it can be particularly useful to maintain a separate schedule or appendix to form part of the trustee meeting papers which specifically sets out all the actions resulting from the meeting.

With good governance high on the Pensions Regulator’s agenda, it is becoming increasingly important that sufficient time, skill and resource is devoted to ensuring accurate meeting minutes. In summary, effective minute writing will involve:

·        preparation to ensure the minute-taker is familiar with the issues and topics to be discussed

·        referring to relevant meeting papers

·        summarising discussions accurately and succinctly, and recording decisions taken (noting that the degree of detail regarding the reasons for a particular decision will depend on what the decision relates to)

·        seeking clarification on an agreed action or decision if necessary

·        clearly setting out the action points and allocating responsibilities and deadlines as necessary

·        prioritising and taking the time (often at least as long as the meeting) to write up the minutes

·        circulating draft minutes and seeking comments, and

·        safely retaining a copy of the minutes.