One of the biggest challenges facing British business is the alarming crisis in its pension arm. Most defined-benefit schemes are in deficit and a complicated new regulatory framework is now in place. Both the regulator and companies are looking to pension fund trustees to play their part in solving the pension problem. But are trustees up to the job? Although they might be well-meaning, plenty of trustees have had little or no training and are unaware of the extent of their role and responsibilities, despite pressure on them to develop greater knowledge and understanding. If they look for help, mostly they are offered dull conferences and dreary handbooks full of intimidating check lists. This is a practical and sensible guide for trustees who need help to do their jobs more effectively. Written by Andrew Freeman, an active trustee and experienced financial journalist with "The Economist", the book mixes real-life advice and insight with easy to grasp explanations of where the pensions crisis came from and what can be done to relieve it.
Freeman talked to a range of other trustees and to some of the UK's leading actuaries and pensions thinkers, including David Norgrove, the regulator, with whom he had an exclusive interview. Among the topics covered in frank and refreshing detail are conflicts of interest. Until recently these have been a taboo subject, as trustees have either been conflicted themselves or have been too embarrassed to point out their fellow trustees' conflicts. Freeman explains how to deal with conflicts politely and firmly, and how to signal that the trustee board understands its duty to act only in the interests of the scheme members. Top actuaries explain how trustees can learn to gauge their powers by understanding for the first time the powers they are given by their Trust Deed, and also what powers they have under the new regulatory regime. This is not just a book for trustees. Advisers who work with trustees will get a rare insight into how trustees think and what guidance they need. Chief executives and finance directors can learn how it is not in their interests to be in conflict with trustees or to allow conflicts of interest to persist.
In short, although it is aimed mainly at trustees, the book will be essential reading for anyone involved in the pensions crisis.
Andrew Freeman has been a financial journalist for almost 20 years, 13 of them on The Economist, where he has held jobs as varied as Banking Editor, American Finance Editor and European Business Correspondent. He is currently Deputy Business Affairs Editor in charge of the weekly back-half three-page special report. Before joining The Economist he wrote for The Financial Times. He worked for two years on Lex, the daily comment column. Prior to that he wrote about euromarkets and stockmarkets. He joined the FT after two years learning the ropes at euromoney, where he was deputy editor of Global Investor, a fund-management magazine. Author of several books and papers, he co-authored 'Seeing Tomorrow: rewriting the rules of risk', published by Wiley & Co in 1998. He also wrote 'The Risk Revolution', a special report and survey for the International Securities Markets Association that was published in 2000.