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A lawyer’s guide to independent trustees
A sponsored feature
The world of pensions law provides great opportunities for lawyers. There’s no doubt about it. Lucrative, even. But are you ready to face your potential nemesis - the independent trustee? If you’re not up to scratch, or if there are any chinks in the armour, no matter how small and insignificant they might appear to you, then watch out. Independent trustees worth their salt will bundle you up and spit you out quicker than you can say pension wind ups!
You might think the independent trustee services provided by you or your firm are first class. And they probably are - but the onus is on you to prove it. You need to make sure your pitch is inch perfect, and that means any questions or queries asked are instantly at your fingertips. Leave nothing to chance. As in most walks in life, preparation is everything.
If you can, put yourself in the mind of the trustee. Remember, it’s the job of pension scheme trustees to hire and fire advisers. Ultimately, they are held responsible if anything goes wrong. And when it comes to appointing a legal adviser to the team, they actually don’t have to. Yes, that’s right. Unlike other advisers, such as the scheme auditor, for example, they are not legally required to appoint a lawyer. So, if approached by a trustee looking for someone like you, or your firm, you’ll have to do a good job selling yourself.
Even although the trustee is not legally required to appoint a legal adviser to the pension scheme, the good news for you is that most do. It is considered good practice to do so because, should legal advice be sought, it can only be obtained through a scheme’s appointed legal representative.
Before going any further, it is worth pondering on the thorny question of fees. Any pension scheme worth its salt will seek to minimise costs. Good trustees will always have uppermost in their minds value for money. Let’s face it, they’re not there to make you a pot full of money. They’re there to help run the pension scheme on behalf of the company’s employees. So don’t think you can simply get away with charging unrealistic amounts of money. You won’t, unless you can convince the trustee the level of advice and expertise you provide really does warrant it.
And it almost goes without saying, your fee structure will be examined minutely, so you’d better make sure all the i’s are dotted and the t’s crossed. Because everything to do with fees, including non-standard work and how much extra charges might be incurred as a result, will be included in the terms of contract or appointment.
The trustee will also take a long hard look at your qualifications and any experience you’ve had with regard to pension regulation, for example, or PPF assessment, pension protection and a whole lot more. Your appreciation and understanding of the business environment will also be closely examined. And don’t try and pull the wool over the trustee’s eyes with the use of legal mumbo jumbo and jargon. Not clever at all. They’ll be looking hard at your ability to communicate legal complexities in a clear and simple manner.
See also How to ensure conflicts of interest are avoided when appointing independent trustees.
So is the independent trustee to be a friend or maybe a foe? It’s entirely up to you.
John Donaldson is a freelance writer and former newspaper reporter for some 20 years.