Case Study: Moving to a Corporate Sole Trustee due to difficulty filling trustee board

LawDeb Trustee Director Anna Eagles explains why and how one of her schemes made the move from a full trustee board to a corporate sole trustee.

Challenge

The Board included LawDeb as the professional Company-appointed Trustee and two long-serving pensioner member nominated trustees (MNTs) who were nearing the end of their terms in office. LawDeb had been a trustee for more than fifteen years and had built up a strong knowledge of the scheme, its members, advisers and the employers.

This was a closed DB scheme with a geographically dispersed membership and continuing difficulties finding MNTs. The company had been looking into liability management exercises to help bridge the funding gap to buy-out in the short to mid-term. It was keen to undertake a number of exercises in consultation with the Trustees, but was mindful of the increased time pressures, complexity and knowledge requirements on the lay trustees.

Solution

The Trustees and Company discussed moving to LawDeb’s corporate sole trustee model and the governance framework that would be put in place. Once the MNTs had a better understanding of sole trusteeship and, in view of LawDeb’s knowledge and insight gained over many years, the MNTs became comfortable with the Company’s proposed changes.

Outcome

Six-monthly quasi trustee meetings are held with the Company, along with regular reporting on administration, investment and covenant issues. Additional meetings with the Company have been held to agree a new and more refined investment strategy; to meet potential buyout providers in conjunction with the Company’s advisers; and to meet the financial advisers proposed for Enhanced TV and Flexible Retirement Option exercises.