Out-Law Guide | 11 Aug 2011 | 9:45 am | 1 min. read
Pension schemes can give rise to all sorts of issues, and cannot operate without good advisers. Using advisers is not always easy, but trustees of a pension scheme should think about the advice they need, and the way they would like this to be given. They should also think about the level of responsibility that advisers accept for the advice that they give.
Choosing pension advisers
Trustees need to feel comfortable with their advisers. They should ensure that they meet the people that will advise them before appointing them.
Consider an adviser's qualifications and experience, the quality of service, fees and the extent to which the adviser accepts liability for their work and the adviser's professional liability insurance. Compare a number of advisers before making a decision who to seek counsel from. Good advisers will be proactive and practical and be aware of current issues and developments.
The terms on which an adviser is appointed should be clear and comprehensive. These must be read carefully. Trustees should be prepared to negotiate with an adviser about what their responsibilities will be, and what their reward will be for conducting their duties. Most advisers will be used to this.
Potential conflict of interests
It is important that trustees consider at the outset any potential conflicts of interest, particularly if their adviser also provides advice to the employer.
Advice that you can understand
Trustees should ensure that their advisers understand the needs of the scheme and do not use too much technical jargon. Advice should be in the format best suited to the trustees, rather than the advisers. Trustees should feel comfortable asking for clarification and should challenge advice they do not agree with.
Trustees should keep advisers up to date in order to receive the best advice. Advisers need to understand the issues faced by the trustees to advise properly. Advisers should also have a good working relationship with the scheme's other advisers.
Trustees should monitor performance and arrange regular meetings with their advisers to discuss concerns and give feedback.