The current challenges that COVID-19 has brought have really highlighted the importance of board resilience and the need to ensure plans are in place to ‘keep going’ in extreme circumstances to ensure critical and essential services continue to be provided to scheme members.

To make sure this happens, trustee boards must consider their business continuity plans. But what exactly do they need to think about to build the resilience required to get through the period ahead?

To support thinking through the relevant issues we suggest pension schemes consider:

1. Core board resilience
2. Meeting resilience
3. Key services and adviser resilience (with focus on continuity of administration services)
4. Communication resilience with key stakeholders (members, sponsor, The Pensions Regulator)

We explore these in more detail below and what you need to consider to build a business continuity plan.

1 Core board resilience

Taking the current situation, there may be concerns around the ability of the Trustee to continue without significant disruption.

• Does the Trustee have a clear protocol for calling an extraordinary business continuity planning meeting, and know what should be covered at that meeting?
• Does the Trustee board have an appropriate number of directors, in case someone becomes ill? Are there succession plans in place for the role of the Chair in particular? Or potential candidates should a new board member be required at short notice? This crisis has highlighted the importance of robust succession planning.
• How familiar is each Trustee director with the roles of the other board members? How easy would it be to step into another’s role?
• Does each Trustee director have a full contact list for the other board members, and key stakeholders?
• Has the Trustee tested its ability to operate under pressure or in response to different scenarios? Future board effectiveness reviews may pay greater attention to decision-making under pressure.

 2 Meeting resilience

To be fully resilient, boards should consider having a range of possible meeting venues and modes, with all board members able to participate in online meetings if necessary.

• How quickly is your Trustee board able to call a meeting? Are all Trustee directors clear on the protocol for doing so?
• Are all Trustee directors equipped to join meetings online? Reminding your board of online meeting tips before your online meeting may enhance the effectiveness of such meetings.
• Are all Trustee directors able to receive electronic meeting packs and correspondence at a secure email address or via a secure site/portal?

3 Key services and adviser resilience

Many pension schemes have service providers and advisers who play a crucial role in not only providing technical advice but supporting the Trustee in the ongoing management of the Scheme. Administrators, in particular, will be in sharp focus in any situation which could threaten immediate short-term service delivery to members.

• Have you obtained business continuity information and assurance from all your key service providers and advisers?
• In relation to the Scheme administrator, have you obtained assurance that critical functions such as pension payroll will continue as normal? Are you clear on which functions the administrator will prioritise in extreme circumstances?
• Are arrangements in place for ensuring sufficient cashflow liquidity can be maintained to pay benefits? Having sufficient funds to pay monthly pension payroll is likely to be the most immediate urgent priority.
• Do your key advisers have clearly nominated deputies / support teams who can step up when required should your Scheme Actuary/Lawyer/Investment lead be unavailable?

4 Communication resilience

In times of crisis, communication channels become even more important. Staying in contact with the Scheme Sponsor, Scheme members and keeping up to date with the latest guidance from the Regulator will be important.

• Does the Trustee have more than one key contact at the Sponsor? How are communication channels between the Trustee and the Sponsor maintained? Many sponsors are under great stress at this time but it is important the pension scheme’s needs are not forgotten.
• Has the Trustee considered how they might issue urgent member communications? And does the Trustee have a policy of when to communicate?
• What online facilities do members have access to?

Next steps

Whilst the COVID-19 outbreak provides an immediate backdrop, these points would apply more broadly, for example in the scenario of a significant cyber-attack on the Scheme.

By thinking about the answers to the above points, the Trustee can use their answers to create a resilient business continuity policy for now, and future use.

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