Trustees have a duty to pay benefits to members, but the current financial environment is keeping them on their toes.

There has been a lot written in the press and commentary from our advisers about the falls in equity markets around the world and the impact this will have had on the funding positions of our schemes.

Similarly, we have seen the impact of the current coronavirus pandemic on employers, the ability for them to run their businesses and therefore the employer covenant.

All of these factors will impact the future security of defined benefit (DB) pension schemes and, depending on where the scheme is in its journey, could have material consequences for the long-term viability of the scheme.

Trustees have a duty to pay benefits to members. Therefore, we must be confident that even in these difficult times, pensions and other benefits will be paid on time.

This is particularly key as pensioners are likely to be some of the most vulnerable members of our society.

Another key process is the payment of death benefits. This is an extremely sensitive time for members’ families, so these benefits need to be dealt with in a timely and efficient manner.

Our members will also expect transfer values to be paid and for new retirements to be processed.


For those firms administering pension schemes, the current period of uncertainty brings new challenges and stretches the business continuity plans of all organisations.

Administration firms will have to deal with the majority of their staff home working and ensure they have coverage if key members of staff fall ill.

So, ask your administrator what processes they have in place to pay members’ benefits and how they are keeping member data secure whilst staff are working remotely.

As a firm of professional trustees, we get to see the business continuity plans from a wide range of administrators.

We are, therefore, able to analyse the answers provided by the administrators and ask further questions as required.

For lay trustees it might be harder, but looking at the business continuity plan of sponsors and other advisers will provide some form of comparison.

“For lay trustees it might be harder, but looking at the business continuity plan of sponsors and other advisers will provide some form of comparison”

I would also recommend asking for confirmation once the payroll is run to ensure that it goes ahead without a glitch.

Once the immediate concern of the next payroll is alleviated, trustees will then need to look at wider administration processes.

The current coronavirus situation will keep much of the UK on lockdown for many weeks, so trustees will also need to ask about the April pension increase exercise.

Many pensioners will expect to receive written confirmation of their new pension and P60s for the tax year.

Are there any other bulk exercises coming up, such as a valuation extract or the trustee report and accounts that trustees need to plan for?

Trustees also need to consider how to communicate with members. Most members still use traditional methods of communication, which means physical correspondence to and from administrators by post.

How will the administrators deal with member queries?

We can expect an increase the use of secure member portals in the future where requests and responses can be made to members without having to use paper communication.


Many schemes are in the position where they have to disinvest on a monthly basis to meet pensioner payroll and other benefits.

Historically, disinvestment forms have required signatures either from named individuals at the administrator or from the trustees.

Pension plans need to make sure they can continue to make disinvestments where signatories are working remotely.

Trustees need to understand what concessions investment managers will make regarding signatures and test process so that trustees know that disinvestment can be made.

Trustees may also want to consider holding more cash than normal so that there are sufficient funds to pay several months of pension payments.

We can be somewhat thankful that technology has moved quickly so that we can all work remotely.

Other Advisers

Then there is the role of other advisers, the scheme actuary and auditor.

Trustees will need to understand whether they will each be able to provide their services remotely and in a timely manner.

For example, schemes have until 30 April to submit deficit reduction certificates which may reduce Pension Protection Fund levies, something that sponsors are likely to be exceedingly thankful for.

Can these be certified in time?

Judith Fish at Dalriada

Judith Fish, Dalriada

Action for trustees

Once trustees have the comfort that all advisers are able to continue to provide their services, they need to look to themselves.

What about business continuity plans? Do all trustees have the ability to work remotely and to participate in conference calls? Does documentation allow meetings to be held remotely?

Now might be the time to review signing policies and decision-making processes to ensure that trustees can continue running the scheme even if some numbers are unavailable due to illness.

Members rely on trustees to make sure their benefits are safe and paid on time. Despite the current difficult situation, we must be confident that we can continue to take care of our members.

Judith Fish is a professional trustee at Dalriada Trustees. She is a qualified actuary with more than 20 years post qualification experience.