Trustees must ensure that they are giving sufficient time to scheme transitions amid the Covid-19 pandemic to avoid being rushed into decisions they are not fully happy with, Premier Pensions has warned.

Speaking to Pensions Age, Premier head of employer services, Sue Pemberton, explained that more time is needed for any project amid the pandemic, with many trustees, lawyers and sponsoring companies taking a more cautious approach.

Considering this, she urged trustees to ensure they are setting “correct” and “accurate” timelines, enabling the whole project team to work at a slightly slower pace and giving sufficient time to review all documents.

In particular, Pemberton highlighted that a lot of the transitions from occupational defined contribution schemes into master trusts were paused amid market volatility at the start of pandemic.

She explained that this in turn created a backlog, with “very high demand” as soon as the market opened back up, and most of the slots for the remainder of the year are already filled.

Furthermore, she warned that whilst providers and trustees have managed to get “dates in the diary”, some of the legal documentation may not be prepared in time.

Pemberton explained that trustees, lawyers and sponsoring companies are being a “little more cautious” around the wording of transitions amid increased external considerations, such as market volatility and the risk of a second lockdown.

As a result, they are “taking a little more time reviewing those documents” and often come back with more rephrasing than may have been seen before the pandemic.

She clarified that whilst this isn’t a bad thing, as trustees are “obviously reacting to the moment”, it means that transition dates, if they have been "squeezed in", may not leave them with sufficient time to review all documents.

This can leave trustees and providers under “significant pressure” to get the legal agreement moved forward, potentially before they are 100 per cent happy, which Pemberton stressed is “never a good position for a trustee to be in”.

Considering this, she urged trustees to work with an adviser whose worked on similar projects during the pandemic and has experience with the added caution emerging, who will ensure the timeline is not "too tight".

Furthermore, she stressed that a good adviser can be "pivotal" in maintaining a strong relationship between the sponsor and trustees in light of this, adding that it is "all about the communication between the two parties".

Pemberton also noted that trustees often plan their project in "good time if winding up", to ensure they don’t need to worry about a new scheme year and the regulatory costs associated with this, such as producing another chair's statement.

However, she warned that delays to timelines amid the pandemic could land trustees with additional costs and pressure from the employer, if they are not aware of the slightly different challenges emerging amid Covid-19.

Despite this, Pemberton acknowledged that the pandemic has also seen some of the drivers towards master trusts become more important, with many corporates "tightening their belt”.

She highlighted that in light of this, master trusts can offer “tremendous savings”, whilst also benefiting members and providing a reduction in risk.

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