Letter: PTL's Richard Butcher takes Now Pensions' Morten Nilsson to task for his recent critique of mastertrust governance.
If service declines good trustees will intervene early to ensure the problem is fixed before it becomes a firing offence
There are, as of today, three insurers who have brought a new defined contribution mastertrust to the market in reaction to auto-enrolment. PTL acts as a trustee on all of them.
In two we are the sole trustee, ie there is no insurer representative on the board.
On the third we are joint trustee with another corporate trustee which, in turn, is chaired by an independent. So while there is insurer representation, the independents have the balance of powers.
As such I don’t agree with Morten. One isn’t “many”.
We are also involved with a number of non-insurer mastertrusts. In these we are predominantly sole trustee, but where not we do have the balance of power.
Morten then alleges that insurer representation hampers the trustees by posing the question, ‘How likely is it these trusts will change the administrator or fund manager, other than to another member of the insurance company... ?’
I agree it’s unlikely, but that’s because we should never get to that stage. If we were to do so it would be a failing on our part as much as on the part of the service provider.
Trustees should not hire and fire lightly. If service declines, good trustees will intervene early to ensure the problem is fixed before it becomes a firing offence. Firing a service provider should be the last resort.
If, however, we ever did get to that stage then absolutely, yes, we would fire. Not to do so would be a breach of duty and so, in our case, invalidate the purpose of our business.
Richard Butcher is managing director at professional trustee company PTL
