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| The
first choice for people
in pensions |
| Trustees
must beware of loss of scheme expertise
By Sophie Baker |
| Pension
fund trustees must keep an eye out for any loss of pensions knowledge
as a result of redundancies as the economic downturn continues to
grip the globe, says Lane Clark & Peacock (LCP). LCP says that the financial turmoil is forcing many UK employers to look to quickly reduce headcount, or to redeploy employees internally. While this makes sense overall for the business, it can also have a significant impact on the usual running of the pension plan if those who are facing change are the ones who own pensions expertise. “For many defined benefit pension plans only one or two people at the employer understand the current operation of the plan and the history,” warned Mark Smith, senior consultant at LCP. “If these people are selected for redundancy, early retirement or redeployment, then the trustees need to act quickly to make sure their knowledge is retained.” Smith recommended that businesses begin succession planning and ensure that records are kept up to date and complete. “The speed of change may mean that trustees need quickly to dust down and put into operation contingency plans discussed during risk reviews. “Resolving issues once key knowledge is lost makes life more difficult and expensive. Trustees of pension plans with complex benefits or poor historic data should be most concerned. Even simple things like capturing where crucial documents are filed can make a substantial difference.” - Pensions Age November 2008 |