Business plan for 2021

Plan your 2021 effectively and make the best use of meeting time by covering the key topics at the appropriate time.

On this page, you can download a business plan for 2021, checklist of key actions to cover at trustee meetings and watch short video summaries explaining why each topic is important for your scheme.

Covenant

Jonathan Wolff, Partner

Top three actions:

  • Make sure any actions are focused on ensuring that stakeholders are treated fairly and that members benefits are protected as much as possible, particularly in the light of what we expect may be a challenging economic background.
  • Work collaboratively with your sponsor and advisers to ensure that covenant strength is maintained in the face of any corporate transactions.
  • Covenant risk should continue to be considered holistically alongside funding and investment risks.

Equalisation for GMPs

Top three actions:

  • Divide the project into smaller, more manageable tasks.
  • Prepare a clear action project plan because of all the different parties and workstreams involved and develop a communications strategy.
  • Get on with the data work, tick off some quick wins and keep an eye on wider developments.

Investment returns

Top three actions:

  • Make sure covenant can underwrite risks being taken.
  • Keep your eye on the long-term target when making all investment decisions.
  • Equip yourself to make quick decisions.

Member options and IFAs

Top three actions:

  • Closely monitor transfer value activity in your scheme and be ready to step in and take action where necessary to protect members.
  • Review your member communications and regularly remind members to ensure that they are fully aware of their options in the scheme from age 55, so that they are not tempted by inappropriate transfers out.
  • If you haven’t already done so, consider appointing a financial advisor to help members.

Pension Schemes Act 2021

Top three actions:

  • Familiarise yourselves with the new requirements and new Regulator powers – perhaps via a trustee training session for the full Board.
  • Seek advice on any live corporate activity (eg M&A activity but also increasingly including ‘business as usual’ refinancing and dividends etc) – to ensure your approach is in line with the new powers.
  • Formalise data/information sharing with your sponsor on changes to the covenant support for your scheme – perhaps in a legally enforceable information sharing agreement and/or a quarterly report from the CFO outlining upcoming corporate activity.

Responsible investment including climate change, voting and engagement

Top three actions:

  • Familiarise yourself with the new climate guidance from the Pensions Climate Risk Industry Group (PCRIG) and develop a plan of action.
  • If you have net assets of £1bn or more, ensure your system of climate governance meets the Pension Schemes Act requirements and prepare for annual climate reporting.
  • Publish your first implementation statement online by 1 October 2021 and ensure you’re getting good voting and engagement information from your investment managers to help you prepare future statements.

Superfunds

Top three actions:

  • Every scheme should assess if and where a superfund fits on its journey plan
  • Circumstances can change quickly – particularly in the current economic environment – so make sure a superfund is considered if you are having to re-think your journey plan.
  • Proactively assess whether emerging solutions could help you more effectively achieve your objectives.

TPR's new funding code

Top three actions:

  • Be prepared: see how your scheme stacks up against Fast Track on our new dashboard and prepare for the need to formalise a target destination and journey plan for your scheme.
  • Understand your key risks, and how they stack up against what can be a changing covenant – can your covenant support your investment risk and long term journey plan, for example?
  • Plan the actions you’d take if things go off track. This may include contingent asset or contribution structures.

TPR's new governance code

Top three actions:

  • Familiarise yourself with the Regulator’s expectations for scheme governance as set out in the 21st Century Trusteeship campaign, paying particular attention to the composition and diversity of trustee boards, risk management and the effective management of conflicts.
  • Work collaboratively with your sponsor to ensure that your pensions scheme’s governance framework is appropriate, particularly in light of the new funding code and Regulator’s new powers.
  • Look out for the new governance code and be prepared to assess your scheme against the requirements, implement any changes that are required and demonstrate that you have an effective system of governance in place.

Our experts

Jonathon Camfield

Jonathan Camfield

Partner

Claire Jones

Claire Jones

Partner

Jon Wolff

Jon Wolff

Partner

Mary Spencer

Mary Spencer

Partner

Jill Ampleford

Jill Ampleford

Partner

Rachika Cooray

Rachika Cooray

Partner

Alasdair Mayes

Alasdair Mayes

Partner

Sam Jenkins

Sam Jenkins

Partner

Laura Amin

Laura Amin

Principal

 
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This page was first published in January 2021
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