Issued: 10 May 2004
The Pensions Trust runs occupational pension schemes for the charitable, social, educational, voluntary and not-for-profit sectors. It is a mutual organisation directly answerable to its members, the employers who choose it to run their pension schemes, the employees in the scheme and pensioners who are now drawing an income from the scheme.
The Pensions Trust offers a variety of pension schemes and all the necessary back-up. This includes independent investment management and monitoring, administration and pensions documentation, while also ensuring that the pension schemes comply with all pension rules. This means that employers do not have to employ their own in-house experts. The employer only needs to provide the monthly contributions and The Pensions Trust does the rest.
The award-winning organisation is directly accountable to its members rather than any shareholders. The members ultimately control the Trust by electing 16 board members. The Trust deals directly with the scheme members saving for their retirement and current pensioners, which reduces the administrative burden on the employers. The Pensions Trust aims at the highest standards of service that is continuously measured, monitored and improved upon while keeping administration costs to a minimum.
The Pensions Trust’s mission statement is: 'The aim of The Pensions Trust is to be our customers’ preferred choice in all products and services we offer.'
History
The Pensions Trust was established in 1946 to provide decent pensions for those working in the charitable and voluntary sectors. It started life as the Social Workers Pension Fund, established by what is now the National Council for Voluntary Organisations.
From humble beginnings with 271 members and net assets of a little over £5,500 in its first year, it now services 3,900 employer organisations and 103,000 members and pensioners. It manages assets of more than £2 billion and has offices in three major cities: London, Leeds and Edinburgh.
The Fund saw rapid growth in the late 1970s and early 1980s due to a large increase in charity and voluntary organisations. In 1987 it changed its name to The Pensions Trust (for Charities and Voluntary Organisations) to reflect its wider remit and continued to grow.
Pensions are rarely out of the news, with changes in rules and regulations regularly on the cards. The Pensions Trust will continue to monitor these changes to ensure its members enjoy the maximum benefit out of future changes.
What The Pensions Trust Offers
The Pensions Trust offers voluntary organisations and charities the chance to have their pension funds run by professionals at a competitive price. It provides a choice of pension schemes to suit and a complete administration service, which includes collecting contributions, record keeping, working out members' benefits and communicating with them. It also gives advice on compliance with legal requirements, offers actuarial services, investment management by independent managers and investment monitoring.
There are four types of occupational pension schemes on offer:
- Money purchase plan: the ultimate benefits are determined by how much goes into the fund and its investment performance. The employer knows just how much it has to pay in.
- Final salary schemes: the benefits are linked to the employee's final salary level; for example, 1/60 of final salary for each year they have worked for that employer. More generous than a money purchase plan, the money put in must be sufficient to match the benefits of the scheme so the employer does not have a finite cost.
- Final salary schemes for groups of employers: for example, several housing associations or voluntary organisations.
- Career average revalued earnings (CARE) scheme: a combination of a money purchase and final salary scheme. The member's pension is based on each year's earnings rather than what they earn in their final years and the employer knows exactly what the costs are. A profit-share arrangement is in place to ensure any 'surplus' goes back to the members.
Investment Principles
The Pensions Trust invests money received from members in a portfolio of funds run by professional investment managers. These managers, chosen with the help of the Trust's investment consultants, come with different areas of expertise.
It is common knowledge in the investment management industry that no one investment management group can offer top class performance in all areas. Some are better at picking shares in UK companies, others specialise in shares of overseas companies; others are better in global bonds, others in property and ethical investment. The Pensions Trust picks those strong in each individual area to manage members' money. Employers benefit from the greater buying power of their combined funds, which leads to lower investment management charges that together with strong fund management have a dramatic effect on fund performance.
The Trust aims to better the average pension fund's investment performance. Good and consistent long-term performance is of paramount importance. It directly affects employers' costs in a final salary scheme and how much pensioners get out in a money purchase scheme.
Case Studies
RUKBA
The Royal United Kingdom Beneficent Association helps people who have helped others during their lives and have done something in the community, such as carers who have no pension other than that which the state provided by. Rukba signed up with The Pensions Trust to manage its final salary staff pension scheme in 1986. Jenny Casmir, Rukba’s Finance Director, says, 'Before we signed up with The Pensions Trust we had an in-house pension scheme. But using experts in the field has given us peace of mind. It means we can free up our staff to do their job of running the charity. We have regular updates and staff statements ever year.'
SCVO
David Kelly, Chair of the Scottish Council for Voluntary Organisations and convener of its Pensions' Committee comments: 'The Pensions Trust is able to offer a final salary pension scheme to the smallest organisation, which is a huge advantage to the voluntary sector. It provides generous benefits at reasonable costs and a customer satisfaction rating bordering on 100%.'
MEDINA VALLEY CENTRE
Medina Valley Centre based in the Isle of Wight is an 80-bed residential centre providing curriculum-based field courses and sailing courses for schools, along with activity holidays for groups and individuals. It uses The Pensions Trust to organise a money purchase pension fund for its small number of full-time staff. Peter Savory, Chief Executive at the Centre, says, 'We have been with The Pensions Trust for more than 20 years and have never had a problem. We can always talk to a real person rather than an answering service, which we appreciate.'
TRUST HOUSING ASSOCIATION
Trust Housing Association uses The Pensions Trust final salary scheme for its employees. Roger Trueman, Chief Executive of the housing association, says, 'We can feel confident that The Pensions Trust is looking after our money and providing us with expert advice, both on looking after our money and on the fast-changing world of pension rules. It inspires confidence in me to be with this large pension provider that specialises in the voluntary sector.'
THE INSTITUTE OF CHARTERED ACCOUNTANTS IN ENGLAND & WALES
The Institute of Chartered Accountants in England & Wales took out a money purchase pension plan with The Pensions Trust in 2000 investing for growth and in ethical investments. Daria Croker, Assistant Manager of Pensions and Trusts at the institute, says, 'We have a final salary scheme that was closed to new members in June 2000. But the institute was still keen to offer a pension for its staff and The Pensions Trust offered an attractive alternative in terms of investment management and administration.'
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