Once a DB pension scheme is closed to accrual and the aim is to work towards its self-sufficiency, the governance requirements of that scheme change. In many cases it becomes more difficult to find Trustees who will join the board since the active membership is declining.

A better way to run a closed scheme can be assured by appointing an Independent Sole Corporate Trustee (‘Sole Trustee’) who:
• Has experience in dealing with all pension related matters
• Can hold advisors to account
• Delivers swifter and less conflicted decision making
• Controls the cost of running the scheme

Client request:
The CFO of this GBP 100m financial services pension scheme wanted to improve the governance of the DB and DC scheme by replacing the board of trustees with a Sole Trustee. The aim was to further professionalise the oversight of the scheme and to formulate a cost-effective strategy towards self-sufficiency.

Our approach:
• The project started by agreeing the key expectations of the underlying Trustee Company, the Sole Trustee and the support team. This included the roles and responsibilities, and a set of criteria against which to assess both the Trustee Company and the Sole Trustee.
• A tender board was set up and a long list of Sole Trustees agreed, based on the best possible fit given the pension fund’s requirements. These candidates were provided with an Information Memorandum and asked to complete a questionnaire.
• A shortlist was agreed with the tender board and the selected candidates were invited for an in-depth interview.
• This was followed by site visits and due diligence for the preferred candidates.
• The Sole Trustee with the best support team and fit was selected.

Deliverables for the client:
• Appointment of the most suitable Sole Trustee
• Cost savings
• Improved visibility on key competencies required from the Trustee resulting in more effective performance assessment

The entire process took less than 10 weeks and provided the CFO and the members of the pension fund with a best-in-class Sole Trustee to run the DB and DC pension schemes.