Pensions expert says “trustees need to look out for themselves”

The watchdog said trustees are the first line of defence for savers and their pension schemes, therefore it is vital they actively monitor their employer’s health to look for warning signs and are ready to act as the economic impact of global events develop. They should also be prepared for any issues arising from Brexit.

Mike Birch, TPR’s director of Supervision, said trustees should monitor their employer’s trading and, where the employer needs to undergo restructuring or refinancing, or is making disposals, they should have open discussions with the employer and other stakeholders to ensure that the scheme is being treated fairly to protect the best interests of their members.

Mike Smedley, partner at pensions advice and wealth management specialists Isio, formerly part of KPMG, said: “When companies face serious financial distress, their pension schemes are pitched against lending banks and multiple creditors such as landlords and HMRC. These creditors are well prepared and advised. The Pensions Regulator is clearly worried that members may lose out if trustees don’t follow suit.

“The government is taking action to protect the economy, but redundancies are soaring, Brexit is looming and the job retention scheme won’t be enough to sandbag some companies. The regulator is explicit that it won’t have the resources to support every trustee where the sponsor is facing dire straits. Trustees will need to look out for themselves, rather than rely on the regulator to fight their corner.”