Question

What is the formal name given to the trustee who administers the pension fund? What role do they play?

Answer 1

Pension Trustee is the formal name given to the trustee who administers the pension fund.

Role of Pension Trustee-
Mainly a Pension Trustee’s role in a pension scheme/fund is positioned in 2 scenarios
1.    Pension scheme offering Defined contribution (DC) benefits
2.    Pension scheme offering Defined benefits (DB)

Pension trustee’s role in Pension scheme/fund offering Defined contribution (DC) benefits
In this pension scheme, the pension trustee has a responsibility to support pension fund members in making informed decisions.
Pension trustee should:
•    ensure that provision is made for members who don’t choose an investment option
•    understand the investment options you offer members and make sure they are offering appropriate fund choices
•    help members to understand that how much they receive from the scheme is linked to how much they pay in
•    encourage members to obtain advice and provide as much support as possible
•    provide timely and relevant information to:
    prospective members about the scheme
    current members about their savings
    members approaching retirement about the options they have

Pension trustee’s role in Pension scheme offering Defined benefits (DB)
In this pension scheme, pension trustee has a responsibility to ensure that there is enough money in the scheme to pay members’ pensions as and when they need to be paid.
To see how much money is in the scheme, pension trustee have to arrange for a valuation to be carried out, not less than 1 every 3 years. This assesses the assets and liabilities of the scheme.
Pension trustee needs to appoint a scheme actuary to carry out this process. If the scheme is not fully funded, pension trustee must draw up a recovery plan and submit it to the regulator within 15 months of the effective date of the valuation.
The recovery plan sets out how much will be paid into the scheme and over what period.
In most cases, pension trustee has to agree on the recovery plan with the sponsoring employer.
Pension trustee also has to be responsible for monitoring pension scheme investment and keeping an eye on the financial records and status of the employer who is standing behind the scheme.