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

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

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 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