- Many clients are members of an Occupational Pension Scheme where professional Trustees are appointed to work in the best interests of the members. Such clients often assume that they can just trust their Trustees
- However there can often be potential for a clear conflict of interest. If the Trustees responsibility is to act in the best interest of their members at all times, then the Trustees should not benefit financially from any scheme restructuring ( e.g. from defined benefit to defined contribution) or scheme wind ups or even when any individual member leaves or retires.
- We have come across many cases where in each of the above instances, the Trustees self-refer to their own firm or another part of their firm. To us this creates a clear conflict of interest, which unfortunately goes unrecognized
- We have been able to provide members with the exact same option as the Trustee with up to 3% uplift in value – for individual retirements, scheme restructuring and wind ups
- It is our position that most employers have never considered this potential conflict of interest and any potential legal liability that might ensue. Perhaps Ronald Reagan had the right approach i.e. “Trust but Verify”. By this we mean, take the Trustees recommendations and then do an external price check to verify the terms/value being provided.