Conducting pension scheme business in socially distant times – Part 2

As we all adjust to working remotely, minimising travel and practicing social distancing, pension scheme trustees face the additional challenge of managing their pension scheme. This Q&A considers practical points for conducting trustee business outside meetings and signing documents.

Part 1 can be found here

Do we need to hold a meeting or can we just agree matters by email?

Part 1 considered some of the practical aspects of holding meetings by conference call. It may be that for some decisions or types of business, you wish to discuss matters by email. You should check the formal governing documents of your scheme to ensure that decisions are still validly taken whether by email, conference call or some other means. 

Broadly, a scheme’s trust deed and rules set out the requirements which apply to trustee decision making. Where the governing documents do not expressly allow for remote meetings or there is some doubt as to whether they do, the safer approach will be to take legal advice with a view to making a small adjustment to the TDR to ensure that decisions may be made by written resolution and/or confirmed through email. The adjustment is, in most cases, not complex and, if properly drafted, gives the trustees the flexibility to make decisions by resolution / email.

Trustees should also check whether the decision they are looking to make is normally subject (in the scheme TDR) to an employer’s consent. Where it is, that consent should be obtained and evidence of that consent carefully documented. Where the power to make decisions by resolution and/ or email already exists (in the scheme TDR), trustees should take care to ensure that the decision in question is carefully documented and taken in a way that accords with the scheme’s TDR.

Where a scheme is administered by a sole corporate trustee, the trustee directors should check the articles of association of the corporate trustee. The principles described above apply equally to a corporate trustee’s articles of association. As previously indicated, where there is doubt, those articles may need to be adjusted to permit the directors to take decisions by resolution and / or confirmed by email.

Can we delegate our decision making?

Some trustee decisions could be delegated to a sub-committee or to an appropriate third party such as the pensions manager or the scheme administrator.

You should check what your deed and rules (and, if relevant, articles of association) allow by way of delegation. Terms of reference governing the scope of delegation will also be needed. Establishing sub-committees may help in coming to quick decisions where needed. These sub committees could either include named individuals or, to allow greater flexibility, perhaps state inclusion of x number of MNTS and X number of company appointed trustees.

Use of delegation by power of attorney is a more complete option lasting usually for up to 12 months. Legal advice will be needed to access this option.

We need to execute certain documents, how can we do this?

This depends to some extent upon (a) whether the document is a deed and (b) what the counter party requires.

There are strict execution requirements in respect of deeds . Your usual legal contact will be able to assist with specific execution queries. You will also need to consider any internal signatory requirements as well as articles of association and relevant deed and rules provisions.

One particular quirk is that if the deed is being signed by a company by way of two directors, those two people need to sign the same piece of paper. This doesn’t need to be at the same time so if timing allows you could post the document to the second signatory to sign. Alternatively, companies can usually execute deeds by one director in front of a witness. Although not ideal, the witness can be a family member provided they are not a beneficiary under the deed. The law does not currently permit witnessing of deeds via webcam as the witness is expected to sign the same counterpart as the signatory.

If the document relates to a contract, the contract can be made verbally (other than in respect of land) depending upon counter party requirements. Therefore, practicalities could mean that the contract can be constituted by email which would at least provide a paper trail for the future. Alternatively, it may be possible to attach electronic signatures.

What if we have limited scanning and printing facilities?

Even if printing and scanning a long document is not possible but a wet ink signature is required to complete a transaction, employers and trustees can make use of case law which confirms that if the executed signature page is scanned back to your lawyers at the same time as the complete copy of the relevant document including all and any schedules, such email can constitute valid execution. You would need to make sure the physical wet ink signatures reach your lawyers in due course but hopefully this means that transactions can take place when they need to. Most smart phones contain a camera meaning that documents can be scanned by phone if needed.

What do we do about sharing documents and confidential information?

As data controllers, trustees must ensure the security of the data that is held in relation to the scheme. This is relevant for both remote meetings and generally in conducting trustee business while working from home.

The ICO’s guidance for community groups during this pandemic is also relevant for trustees working remotely. The key points are:

• Lock it away when not is use (including laptops USB sticks etc);
• Keep software up-to-date;
• Communicate securely use a secure messaging app;
• Be extra vigilant about opening web links and attachments or other email messages
• Back up your information; and
• Use strong passwords and encryption and pseudonymisation when necessary.

On conference calls rollcalls should be taken to ensure only those necessary are on the call particularly if personal data is to be discussed. Trustees should also ensure they have an appropriate place to have virtual meetings so that information cannot be overheard.

Documents for destruction should be kept safe until secure destruction can be assessed. Many trustees shred papers or return such items to the sponsoring employer to destroy. The latter arrangement may need adjusting if their offices are closed or down to skeleton staff. Placing unshredded items in ordinary household recycling bins is unlikely to count as secure destruction.

Actions to be taken

You should check your governing documents to see whether there are any particular formalities around conducting trustee business and documenting decisions. Where you know that certain contracts or scheme documents are due to be signed, a degree of planning will be needed to identify any obstacles in the signing process.