Pi Partnership

A warm welcome to Laura Johns and Hosung Jeon. They both bring a world of experience to our clients and to our growing Pi-team.

Growing our Independent Pension Scheme Governance Team We are delighted to welcome Hosung Jeon and Laura Johns to the Trustee Executive Services team. See more about their expertise and experience on our website

Delighted that our colleague Sandra Harvey will be joining RSM for a webinar on the applications of AI in pensions. Sandra will sharing her practical insights into how this technology is developing based on her experience as a Scheme Secretary. https://lnkd.in/e2QscwvN

Delighted that our colleague Sandra Harvey will be joining RSM for a webinar on the applications of AI in pensions. Sandra will sharing her practical insights into how this technology is developing based on her experience as a Scheme Secretary. https://lnkd.in/e2QscwvN

Last week we held our first Breakfast Seminar for 2025 on Dashboard Decisions. We were joined by Angela Bell, an Industry Engagement Specialist from The Pensions Regulator, who has been working collaboratively with industry in their efforts to comply with their dashboards duties. Angela shared the most recent updates on dashboards, TPR’s approach to compliance and enforcement, as well as the latest hot topics from industry. We also heard from Jon Pocock PM.Dip, the Pension Dashboard Delivery Manager for Broadstone, who shared his practical experience of the decisions Trustees need to make and where issues can arise. As ever, it was an engaging conversation about the challenges and considerations that must be understood as we head towards the ‘connect-by’ date. You can find the presentation on our website for more information. https://lnkd.in/e6JWYGN2

Valentine’s Day - Tale of an unloved pension scheme Once upon a time, there was a lonely unloved pension scheme, at sub- £20m it was too small for most people to pay any attention to it – once it had been loved but over the years the people who cared about it, had retired and now the owner was many miles away. But the owner still cared and knew that it needed to appoint someone to look after the pension scheme and its members, so they appointed a gallant Sole Trustee, who together with his trusted team prepared a transition plan and, over the following weeks and months, identified where they could make a difference, not just overcoming challenges but also looking for opportunities in making the most of the Three Sisters:. · Governance – challenges in frequency and recording of trustee meetings, late completion of the annual trustee report & accounts, incomplete or missing scheme policy documentation (e.g. risk register, IDRP, etc) and an abandoned project to update the scheme rules, all formed a list of actions for the Sole Trustee to address. They put in place a new regime to ensure key cyclical governance tasks were identified/allocated, whilst proportionate compliance with prevailing regulations and best practise. · Investment – scheme assets were managed by a private wealth investment manager, with ‘oversight’ services provided by Baron Makesmoney. The Sole Trustee quickly identified that returns were below benchmarks agreed for the scheme, whilst an apparent disconnect between scheme assets and the prevailing funding position, meant the investment strategy carried too much risk relative to actual returns. The Sole Trustee identified that the scheme was being charged more than 120bps for investment-related services and was able to not only save money but agree a new approach and strategy. This ultimately led to the appointment of a fiduciary investment manager, with a more dynamic and integrated approach to funding & investments and a reduction in fees of c50%. · Advisory services – the Sole Trustee was interested to work with a scheme actuary and administration team from a previously unknown advisory firm. The scheme had engaged their services over many years, however, the Sole Trustee had concerns about the strength and depth of their resources, whilst keyperson and succession planning were identified as potential issues. Following a review and further analysis, the Sole Trustee knew that for the scheme to thrive, new advisers would need to be appointed and with the support from the sponsor, managed a tender process that ensured long term stability and support for the scheme. So the gallant Sole Trustee worked quickly and carefully to prepare the scheme for the future, worked closely with the owner and ensured the scheme was no longer unloved but was able to benefit all stakeholders today and into the future. 

Hear from our Insight Partner, Pi Partnership The dashboard programme is now well underway, and industry is busy working towards their connection dates. There is still significant work required to comply with dashboards duties – schemes need to understand what needs to be done, and how their advisers and providers will be supporting them. Schemes need to consider what the ‘connect-by’ date that is set in DWP guidance means for them and will need to work closely with those playing a supporting role as they plan how they will meet their dashboard duties, including getting on top of their data. From a governance perspective, decisions are being made around how to prioritise the accuracy and completeness of the data held by schemes. It isn’t just about maintaining high-quality data but also ensuring that schemes can provide members with correct information promptly, through the dashboard. There is a delicate balance between enabling members to have access to their information while keeping their personal and financial details secure.     As we know from the past, providing information in a vacuum, without context and access to additional support doesn’t always have the best outcomes. Dashboards are undoubtably a great way forward in helping people engage with their retirement planning and hopefully help address the £31.1 billion lying in unclaimed, inactive, or lost pension pots, according to research published in 2024 ahead of the National Pension Tracing Day. The study carried out by the Pensions Policy Institute (PPI), sponsored by the Pension Attention Campaign, showed almost 3.3 million pots not currently claimed by their owner.     Read the full article here – https://bit.ly/42XCwmt #PiPartnership #PMIpensions #pensionsUK #PensionsDashboards

The recent clarification by HMRC, stating that tax-free lump sum withdrawals from pension schemes cannot be reversed has sparked significant debate among financial advisers and pensions industry experts. As trustees and pension scheme secretaries, some of our schemes are being asked by members how they can return payments of pension commencement lump sums (PCLS) or uncrystallised funds pension lump sums (UFPLS) that they had taken because of speculation about changes that might occur, affecting their benefits following the 2024 Autumn Budget. Many advisers have expressed concern that this rigid stance by HMRC may adversely affect members who, influenced by speculation about potential policy changes, withdrew their lump sums prematurely. The inability to reinvest these funds into pension schemes could disrupt long-term financial planning and diminish retirement savings. Some experts argue that a more flexible approach, such as allowing a “cooling-off” period for such withdrawals, would better serve members' interests. Unfortunately, HMRC have maintained their position that current regulations do not permit the reversal of tax-free lump sum payments and believe that this position upholds the integrity of pension regulations and prevents potential abuse of the system. This debate reinforces the need for clear communication and guidance for members regarding pension withdrawals. Whilst HMRC's stance is rooted in regulatory compliance, the concerns raised by industry experts underscores the importance of flexibility and informed decision-making in the management of pension savings. There is a question here for trustees to ask themselves whether they have a role in ensuring members are making informed decisions about their retirement savings. We recognise that trustees and employers must navigate a delicate balance between supporting members’ autonomy and protecting them from poor financial decisions.  Providing comprehensive member education, such as seminars, workshops, or one-on-one financial advice, requires significant investment that many schemes or employers cannot afford. Similarly, addressing immediate operational needs, such as annual benefit statements or statutory reporting can detract from proactive initiatives like financial education. Should trustees place more emphasis on proactive communication to prevent member confusion or non-compliance with lump sum regulations, or is this something that can be addressed reactively if problems arise? With further suggestions from Treasury only recently that pension funds could be subject to inheritance tax it once again brings to the fore the conflict between short term political announcement and long term pensions savings.

Pi Partnership’s Response to the “Fit for the Future” LGPS Consultation - Mike Weston Historically there has been little overlap between professional trustees and the LGPS. That may be about to change. Pi hopes that when the Government reacts to the “Fit for the Future” consultation responses it confirms the role and requirements for professionally qualified pension scheme (not simply investment) advisers, and allows LGPS members and sponsoring employers to benefit in the same way private sector pension schemes have from increased professional trustee governance over the last few years. In the recent “Fit for the Future” LGPS consultation that closed last week the government has suggested that each LGPS fund should be “required to appoint an independent person who is a pension professional….as a voting member of the Pensions Committee or as an adviser. The role would encompass supporting the committee on investment strategy, governance and administration.” The Government expects that suitable pensions professionals would be PMI or APPT accredited and qualified, and have significant experience. Currently LGPS independent advisers typically focus solely on investment rather than broader pension scheme governance and management. Broadening and professionalising this external input appears to be the Government's intention here. Pi fully supports these proposals. Looking through the consultation responses that have been published so far, there is generally little opposition to this initiative. What concern there is centres around a need for additional clarity of the scope of the role and a worry that appointees will be considered as “quasi professional trustee” experts to whom other Committee members would defer, thus undermining democratic accountability. An essential skill for professional trustee members of private sector pension scheme trustee boards, exemplified by the team at Pi, is the acute awareness of this risk and the ability to avoid or manage it. We believe that if appropriately qualified and experienced professional trustees are appointed, the same effective risk management will happen across the LGPS. And offsetting this perceived, rather than real risk, is the opportunity to bring proven pension scheme governance skills, focussed on member outcomes, the exercise of fiduciary duty, regulatory compliance, and very importantly, holding outsourced fiduciary managers (the newly envisaged role for Pool Companies) to account.

Enhancing Pension Governance with Pensions Management Institute (PMI) We are delighted to be working with the team at Pensions Management Institute to share our knowledge and expertise, with the membership, in designing and implementing robust governance solutions that meet the challenges of today’s pension environment. We believe a well-governed pensions industry is a fundamental pillar of society to ensure secure incomes in retirement are available to an engaged and well-informed membership. We see governance as being at the heart of all of our services, whether that be professional trusteeship, independent scheme secretary or governance specialist. As an employee-owned organisation, every member of the team takes pride in developing long term relationships and is confident in our ability to make the lives of our clients that little bit easier. Providing expert support whatever challenges may arise and delivering the very highest standard of service is central to our ethos as an independent company. A big part of maintaining this expertise is working closely with the PMI to ensure our team undertake and maintain the very highest levels of qualifications.