Many people benefit from having a daily routine of some sort. Repetition takes away the stress of having to make lots of small decisions. For example, I take a brisk walk along the same route from the station to my office most days – I can judge whether I’m running early or late depending when I spot certain regular fellow commuters. But routine can also stifle perception. Some days I cannot really distinguish today’s walk from yesterday’s walk.

How is this relevant to pensions?

During my career I have been present at a lot of trustee meetings. It is natural that trustees will focus on some agenda items more than others. Less frequent events like signing a buy-in contract, the results of an actuarial valuation or the appointment of a new investment manager may merit the lion’s share of the meeting. In turn, this may lead to less time being spent on more routine matters like quarterly reports from administrators or other service providers, unless there is a particular problem to address. Delegation is a necessary part of a pension scheme trustee’s role, but it does not absolve trustees from responsibility for managing the scheme. It is essential that trustees monitor their service providers appropriately.

“Standard” service provider reports may be entirely suitable, most of the time. Trustees become familiar with the format and can skim through information quickly and spot any anomalies that need further questioning. However, trustees should periodically stop to consider whether standard reports still cover the issues that they are most concerned about; additional (or more frequent) information might be helpful from time to time.

For example, if a defined benefit scheme has a higher than usual instance of requests for information relating to transfers out, is this something that trustees should keep a close eye on? Is it possible that pension scammers are circling? Should the trustees consider a monthly report on this activity rather than a quarterly report, so that they are better informed?

As a further example, trustees should closely monitor a service provider who is failing to meet agreed service levels. An adequate explanation for any failures should always be sought and obtained. Any service provider can have problems due to staff illness or turnover – but, although trustees may sympathise, they are still responsible for the scheme’s management. Short term problems need to be monitored and managed to ensure that improvement plans are acted upon.

I am offering this as “food for thought”. There is no “one size fits all” in terms of what works for pension schemes – the important thing is for trustees to make sure that they monitor the issues that are most relevant to them at any given point in time.