Improved governance of professional corporate sole trusteeship is a welcome development

A new Code of Practice (the Code) governing the operating standards of sole professional trustees of pension schemes will take effect from 1 January 2021.

Developed by the Association of Professional Pension Trustees (APPT), the Code will provide assurance to those businesses which have adopted, or are looking to adopt, a sole trusteeship model in order to manage their occupational pension scheme risk.

Shehzad Ahmad, a Trustee Director at Ross Trustees and the lead for the delivery of its sole trusteeship offering, has played a central role in the creation of the Code. Ahmad comments: “We welcome the introduction of the Code and acknowledge the hard work the APPT has invested into its creation. The Code provides a clear framework for best practice. It outlines how sole trusteeship service providers need to evidence robust governance structures, as well as the necessary depth of resource, to deliver optimum outcomes for all stakeholders.”

“Professional corporate sole trusteeship is ideally delivered by a broad team of pension specialists drawn from diverse backgrounds and disciplines. This is important as it provides all parties with the reassurance that key decisions are made in an informed, balanced and impartial way and that the necessary checks are firmly in place.”

Approximately a third of Ross Trustees’ appointments are as sole trustee and Ahmad believes that the model will become an increasingly attractive option for employers as they contend with the challenges of the COVID-19 crisis, as well as the increased demands placed on lay trustees. “Sole trusteeship is a streamlined and efficient approach. It can often result in faster decision-making that enables schemes to capture market opportunities and achieve the best results for both scheme beneficiaries and employers. The model further enhances our relationship with advisers too, whose skills and knowledge are utilised in different and innovative ways.”

“It is, however, important to note that a sole trustee model may not be suited to all circumstances or clients. There is real value in the co-trustee model in numerous instances and this model will remain valid for many employers and their pension schemes.”