The Benefits of Appointing a Professional Trustee
On this page we summarise the governance benefits that pension schemes can derive from appointing a professional trustee and how we work with clients to ensure their diversity, experience and skill requirements are achieved.
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Governance Expertise and Experience:Professional trustees possess in-depth knowledge of pension regulations, risk management, and governance best practices. Their specialized skills enable them to navigate complex legal and regulatory frameworks, ensuring compliance and effective decision-making. By leveraging their expertise, pension schemes can enhance their governance structures and make informed decisions that align with the best interests of scheme members.
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Independent and Objective Perspective:As external experts, a professional trustee is not influenced by internal politics or conflicts of interest. This impartiality allows them to act in the best interests of scheme members and make decisions based on merit rather than personal biases. By introducing an independent voice, a professional trustee can help mitigate potential conflicts and ensure that decisions are made in a fair and transparent manner.
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Enhanced Risk Management:Professional trustees possess a deep understanding of risk management principles and can help pension schemes identify, assess, and mitigate risks effectively. They can develop robust risk management frameworks, establish appropriate controls, and monitor risk exposure on an ongoing basis. By implementing sound risk management practices, professional trustees contribute to the long-term sustainability and stability of pension schemes.
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Fiduciary Duty and Accountability:Professional trustees are legally bound to prioritise the financial security and welfare of scheme beneficiaries. This duty ensures that professional trustees are accountable for their actions and decisions. By appointing a professional trustee, pension schemes can demonstrate their commitment to strong governance and responsible stewardship of scheme assets.
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Access to Networks and Resources:Professional trustees can leverage these connections to stay updated on industry trends, regulatory changes, and emerging best practices. This access to networks and resources enables professional trustees to bring fresh insights and innovative ideas to pension schemes. By tapping into these networks, pension schemes can benefit from a broader perspective and stay ahead of the curve.
How Mercer supports schemes in the appointment of a professional trustee
As a leading global consulting firm, with over 1,300 UK pension scheme clients, Mercer is uniquely positioned to assist pension schemes in the appointment of a professional trustee. We have a dedicated governance team who have a deep understanding of the roles and responsibilities of trustees and extensive experience of working with all of the leading professional trustee firms. We are therefore able to provide valuable insights, guidance and support to ensure a scheme’s unique needs are met.
As part of the appointment process we are able to support schemes in the following areas:
- Provide a whole of market overview
- Guidance on the type of appointment (Co, Chair or Sole Trustee)
- Assess the skills, qualifications, and experience of potential trustees and match them with the specific needs and objectives of pension schemes to develop a long list of candidates
- Support schemes with the RFP process and conducting due diligence on professional trustee firms and individual candidates
- Brief candidates and manage the interview process
In summary Mercer's comprehensive understanding of the pension industry, expertise in pension governance, and existing relationships make them the ideal partner for pension schemes looking to appoint a professional trustee. By leveraging Mercer's knowledge and network, pension schemes can enhance their governance structures, improve decision-making processes, and ultimately achieve better outcomes for their members.