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Pensions, pitfalls and presentation screw ups - musings from the box room

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There is no doubt that 2020 presented a challenging environment for trustees, administrators, and advisers. Whilst we still find ourselves battling against the virus, economically and socially, we have had to alter our ways of working. Some of these adaptations have resulted in improved efficiency, timeliness and strangely enough, engagement. Not something that you would expect during a period where our everyday freedoms are restricted.

Whilst the shocking scenes in northern Italy in February 2020 served to give us advance notice of Covid-19’s forthcoming impact on the UK, nothing could really prepare us for the cliff edge event of national lockdown announced by Boris Johnson on the evening of 23 March 2020. For pension scheme administrators this presented a major challenge, with IT hardware having to be relocated to bedrooms and dining room tables overnight along with the set up of secure remote connectivity to work servers.

However, adversity has driven innovation and change across several areas that were previously taken for granted pre Covid-19. These changes have benefited trustee boards and their members. A good example would be the antiquated approach of having to obtain wet signatures for scheme documents such as accounts, investment dealing instructions and meeting minutes. Now it is commonplace for execution software such as DocuSign to be used to authorise and approve scheme documents in a matter of minutes. The majority of investment managers, who love a wet signature, have relaxed their requirements to help ensure that cashflow requirements of schemes are met and pensions paid on time.

During 2020 administration teams saw a marked increase in member contact. Long periods of furlough, or simply being stuck indoors has allowed people time to think about those important issues that just never made their way to the top of their to-do-list. Pensions definitely falls into that category, and whilst we have not seen members looking to increase their pension savings (entirely understandable given concerns around job security and reduced earnings whilst on furlough), they have been requesting confirmation of their accrued retirement benefits e.g. retirement illustrations and reviewing their investment choices (DC).
In addition, trustee boards have increased the frequency at which they engage with their members. A good example would be the material increase in the number of members registering for online access due to communication exercises promoting the benefits of self-service member portals.
Pensions can be a divisive subject with many differing views on how to best solve the UK’s pension problems and effectively manage the jumble of pension arrangements in place. Defined Benefit and Defined Contribution schemes, in all of their various incarnations, present a multitude of issues requiring the attention of trustee boards and employers. Throw into the mix the seemingly never-ending trope of regulation and diktat from the likes of DWP, the Pensions Regulator and the Government and its easy to see why trustee boards and governance committees have overflowing agendas.
A BIG positive is that the remote working environment has resulted in more frequent meetings of a shorter duration. As a result, meeting agendas are more focused with fewer items requiring the attention of the participants in one sitting. In turn, this has reduced time pressures, resulting in more detailed discussions and decision making.

The benefits and perils of meeting software

If I had a £1 for every time I have had to say “you’re on mute” or “shut the door” my retirement plans would be far more advanced and in a healthier state than they currently are!

How many of you had a chuckle at Professor Kelly’s expense when his children gate crashed his interview on the BBC way back in 2017? Well, I think it is fair to assume that many of us have since found ourselves in some form of “Zoom blooper”, whether it’s the family pet jumping on the desk, a pajama clad family member waltzing into the room mid-presentation or a sickening realisation that your latest purchase from the M&S underwear section is that day’s Microsoft Teams background (I’ve seen all three…).

For all the potential pitfalls associated with using meeting software and the inability to establish personal relationships through face-to-face contact, it has proved to be a great tool to enable the continued delivery of advice and good governance. I fully expect its usage to continue, to some degree, when this nightmare is behind us.

Undoubtedly, it has been a very difficult period but we can now see the light at the end of the tunnel. Hopefully, we will start to return to some form of normality soon, and when we do, we should take these positives (admittedly small ones in the grand scheme of things) with us in to 2021 and beyond.

Take care and keep safe all.

Phil Farrell, Partner, at Quantum Advisory