The first thing to say, where a day in the life of a non-professional trustee is concerned, is that there is no typical day as such: certainly not where their trustee duties are concerned at any rate.
After all, being a trustee isn’t their day job. Between the hours of 9am and 5pm, they could be engineers, postmen, doctors, firewomen or teachers. It’s only ‘after hours’, so to speak, that they put their trustee hats on and get to work.
Our research found that, on average, a non-professional trustee will devote 17 hours per month to their trustee duties.
This blog post will examine in greater detail what they get up to.
What are the main tasks of a trustee?
The quarterly work of a trustee is bookended by board meetings. Each quarter usually begins with a wrap up of questions discussed or resolved in the previous meeting, and will continue into making preparations for matters to be discussed in the next one.
For example, the previous board meeting may have given rise to important questions which the trustees need to come to an agreement on. Which asset managers, for instance, should the scheme long list as part of a selection process? Or what investment strategies should be considered in the wake of Brexit?
After the meeting, the details of these matters will be circulated to the trustees, and they’ll get the opportunity to go and put together their thoughts. Then they can begin working with each other in order to reach a consensus, which can then be formally agreed upon at the following meeting.
That’s often easier said than done though, said one interviewee.
“It can be difficult getting consensus, especially where you have opinionated trustees. As a trustee, you need to be receptive towards other people’s points of view. You can’t just dismiss your colleagues if you disagree. Sometimes you have to be prepared to be wrong, and have the humility to realise that you are. You have to be prepared to change your view based on someone else’s argument.”
Trustees can have additional duties to perform such as their work for sub committees within the scheme. Sub committees will handle specific areas of work, such as investment. Typically the trustees who work on such sub-committees do so because of their expertise or interest in the field its work pertains to.
What takes up the most amount of trustee time?
Trustees’ main tasks may be administrative in nature, but they actually spend most of their 17 hours per month growing and maintaining their industry knowledge.
Remember, trustees are at the top of the pyramid when it comes to making the scheme’s decisions. To make those decisions effectively, and ensure that they represent their members adequately, they must have a sound knowledge of finance and legislation, as well as day to day happenings in the broader business world – or at least those which may affect the scheme.
That’s not always easy for non-professional trustees. Even in those instances where they come from a financial or legal background, they will still have to tread water just to keep on top of the latest industry developments. That effort becomes more difficult where, as is common, the trustee in question has no such experience, professionally or personally, in these areas.
Making Sense of Things
The language of finance is a mine field of technical jargon. And, at a broader level, the daily workings of the City and Westminster can be highly esoteric and difficult to pin down in real world terms. Trustees there need to develop a degree of fluency in money matters in order to do their job effectively and must also be good at looking at the headlines and understanding what implications they could have for their scheme in practice.
One particularly difficult area of study is pensions law. UK statutes, which are ironically written in ways designed to reduce uncertainty and ambiguity, routinely leave the uninitiated reader scratching their head. They are documents written by lawyers for lawyers, and that sometimes occasions the need to use of an adviser to translate for the trustees.
“Some of the legislation is hard to understand – unnecessarily so, I would say. It’s not always easy to understand without paying for an adviser. It doesn’t make sense to me that you’d legislate in such a way that the common educated man on the street wouldn’t be able to understand what’s being meant.“
And, of course, the raft of legislative changes brought in over recent years – often earning the government accusations of tinkering and meddling, even from industry professionals – have done little to ease the burden.
Trustees go about scaling this moving mountain of knowledge in several ways.
Trade press publications, such as Professional Pensions, are an important piece of equipment, enabling them at a stroke to focus their time and attention on the most relevant news from the week, and to form a critical view on it.
But there are also more formal structures in place. Schemes we spoke to offer training to their trustees, normally once every quarter. In addition, trustees are often able to enjoy free places at industry events, enabling them to improve their knowledge of the industry, network, and exchange knowledge.
However, the degree of access that non-professional trustees have to training opportunities very much depends on their employer’s attitude.
The Attitude of The Employer
Non-professional trustees have enormous knowledge demands placed on them, and have to invest considerable time into improving that knowledge. But they also have to balance this commitment with their day job – a job which could be very demanding and push them beyond the usual 9am to 5pm hours.
Under such circumstances, the attitude of the employer towards their trustees makes all the difference.
An employer which understands the value of well-trained trustees is likely to offer its them more time off of their day job to get trained, and may even chip in funding for this, depending on its size. This leads to trustees feeling more valued in their role, less guilty about taking time to train, and ultimately improves the service they can deliver to members.
Where an employer doesn’t understand the importance of trustee training, the opposite is true, leading to feelings of frustration.
“My employer was very flexible on me taking time out to go and be a trustee, but that’s not the case in every business. It’s hard where trustee want to do the role well, but their employer doesn’t offer the opportunity to let them be at their best.”
Interviewees were in favour of the introduction of a legal framework demanding that businesses let their trustees have time off for training.
Employees become non-professional trustees for the same reason that, we hope, politicians become politicians: namely the chance to be of service to those they represent. As one interviewee remarked:
“You’re essentially an elected representative, and you can do a lot of good.”
But it’s a position which comes with a lot of responsibility and the need for considerable commitment. Trustees wage a continuous war of knowledge acquisition against an ever evolving mass of legal and financial current affairs, and must find the time to do this whether their employer supports them or not. After all, where non-professional trustees are concerned, a typical day in the life begins only once their day job has finished.