In an age where qualifications are perceived rightly or wrongly as the guarantor of greater professionalism, the idea of a lay trustee seems almost anachronistic.But with the winds of change sweeping through the pensions industry, driven by major government reforms, perhaps it's time to consider afresh professional trustees versus their lay counterpart.
The lay trustee, not to put too fine a point on it, has been dogged for years by the term 'amateur', whether deserving or not. In fact, for some the term is nothing short of a badge of office, something to be proud of, a measure of their altruism and the antithesis of the professional trustee.
Would that all change if they were paid for their services? Probably. Because a high level of professionalism would surely be expected in return. And many would say, given the increasing complexities involved in carrying out the duties of a trustee, no bad thing either. A quick glance at the Pensions Regulator's guidance for trustees makes clear just how much is expected nowadays.
The law, says the Pensions Regulator, requires that trustees have knowledge and understanding of the law relating to pensions and trusts, as well as the principles relating to the funding of pension schemes and the investment of scheme assets. The law also requires trustees to be familiar with certain scheme documents including the trust deed and rules, the statement of investment principles and the statement of funding principles.
Trustees have six months from the date of their appointment to acquire the appropriate knowledge and understanding. And in order to help trustees achieve this, without incurring any additional costs, the Pensions Regulator has put together a free e-learning programme called the Trustee toolkit.
The Pensions Regulator describes the toolkit as a 'highly engaging, interactive online learning experience' which allows trustees to test their knowledge and understanding as they go along and then to print out a certificate demonstrating they have successfully completed the toolkit.
“In becoming a trustee of an occupational pension scheme, you are choosing to take on an extremely important role,” says the Pensions Regulator.
"As a trustee, you are responsible for the proper running of the scheme – from the collection of contributions, to the investment of assets and payment of benefits. The scheme members look to you to make sure that the scheme is well run and that their benefits are secure."
Part of the problem why the debate over lay and professional trustees has been dragging its heels for so long is the lack of any definitive stance taken by the major national bodies, including the Pensions Regulator. Instead, it's left very much up to the discretion of individual pension schemes.
Whether that will always be the case remains to be seen. However, according to some recent research into the issue, the majority of schemes do in fact pay some of their trustees, with a tiny fraction paying all of their trustees. But only a quarter of those paying actually paid lay trustees.
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