The funding gap is widening and the challenges pension schemes face in meeting their long-term objectives are increasing.
Addressing these issues is crucial to understanding what it takes to be able to pay your members’ benefits. Lay trustees, however, are not meant to be experts. They rely on their advisors for specialist advice and guidance. We believe that trustees who are equipped to ask probing questions of these advisors are more likely to achieve success
It’s with this in mind that Russell developed its one-day trustee training program. The focus is on helping trustees understand the complexity of decisions regarding the investment of pension fund assets. Our ultimate aim is to improve trustees’ knowledge and understanding of investment matters such that they can make informed decisions regarding their pension plan. By being better equipped, trustees will see improvements in their funding level by taking more timely decisions in this important area. Investment returns play a key role in securing members’ benefits.
The one-day session follows the themes explored in Russell’s trustee guides, the Fiduciary Handbook part one and two. The books co-authored by Sorca Kelly-Scholte and Don Ezra, two long standing members of the Russell team. The handbooks and the training day covers all aspects of pension fund investing, from the principles underlying the defined benefit mission to ongoing management of the investment arrangements. The workshop is split into four sections. The focus of the first two parts is to help attendees understand the nature of the defined benefit pension promise, and define the drivers behind asset and liability values. We also set out different approaches to planning and strategic decision-making and the inputs that require consideration. With the guiding principles defined, the second two parts explain how to successfully implement an investment strategy and ensure it continues to remain appropriate in an ever changing world.
The session is designed to be interactive; we take the theory from the handbooks and bring it to life through a series of interactive workshops. Using data for an average pension scheme, or individual pension plan if the attendees share this in advance, we help trustees relate the theory to their own situation. For example, one of the areas we explore relates to the impact of changing bond yields on the size of the pension liability. We demonstrate how unexpected changes in interest rates can lead to very large moves in liability values, something many are familiar with following 2014.
Over the past year, we have hosted a number of sessions both in London and throughout the country. The workshop is not only for trustees. Attendees have included a range of pension professionals including, trustees, independent trustees, pension managers and other members of in-house pension teams. The workshop qualifies for CPD and is accredited by the PMI. Lead presenters include John Gillies, independent consultant and Steve Delo, Engaged Investor’s Independent Trustee of the Year and chief executive of PAN Governance.
Feedback from the sessions has been extremely positive, with 100% of the trustees who have attended so far agreeing that the workshop helped improve their knowledge and understanding of pension theory. Frances Corbett of the NAPF had the following to say: “Hits the spot! Trustees need more of this type of training from the investment industry!”
We have a number of other sessions scheduled for the rest of 2015 and are in the process of finalising dates for the first half of 2016. If you would like to join the training event please register online at: www.russell.com/workshop. Further information about the course and copies of the handbooks are also available on the website.
Wednesday 16 September, Charing Cross Hotel, London
Thursday 1 October, Waldorf Astoria, London
Thursday 12 November, Charing Cross Hotel, London
Tuesday 17 November, the Lowry, Manchester