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Case Study: Corporate Sole Trusteeship for flexibility and efficient decision-making

Driver(s) for change:

  • The scheme had been in-house until 2007 and then was outsourced and went through a number of changes of administrator as a result of business re-structures/acquisitions
  • The quality of administration was poor - electronic member correspondence files did not exist for around 80% of members and paper files could not be located
  • Sponsor was looking to appoint a co-trustee with the view to move the scheme towards a PCST model
  • Sponsor didn’t want regular trustee meetings so having a PCST allowed for more flexible communications and quicker decision making
  • ENDs were finding it difficult to manage the conflicts of interest and the MNDs were struggling with the complexity of the role. As a result, the relationship with the sponsor was becoming increasingly fraught with lots of legally drafted letters being exchanged

Key challenges presented clearly and transparently by LawDeb:

  • Transition would require lots of remediation and due diligence work due to the inefficient administration of the scheme
  • Unexpected loopholes and costs due to key documentation being improperly filed/lost

LawDeb’s Solution:

  • LawDeb ran a selection process to replace the existing poor-performing administrator. 
  • An exercise was undertaken to correct pension increases, which had been applied incorrectly for a number of years
  • Data validation and remediation project undertaken by the new administrator
  • Under LawDeb’s stewardship, the scheme went through a period of fixing historic data and administration issues as well as legal issues following closure of the scheme in 2013
  • Putting in measures to improve the governance and funding of the scheme
  • In 2018, the feeling of the sponsor was that things had got to a better place and it was time to agree future strategy and a long-term funding target, with input from the new group parent
  • Moving to CST “de-stressed” the relationship with the sponsor and enabled it to move to a much more professional and collaborative footing
  • Decisions on for example valuations/funding and investment strategy are able to be taken much more quickly but no less robustly
  • CFO is very positive about the experience of moving to CST