Letter from the CEO
The coronavirus crisis has emerged as the worst peacetime emergency of the modern era. Its impact has been both immediate and wide-ranging and has disrupted all aspects of everyday society. Within the specific context of the pensions industry, its influence has been colossal. The devastating impact on the international markets has resulted in massive reductions of asset values and has seen trustees and sponsors struggle to address funding issues. As many as eight million employees may have been placed on the Government’s emergency furlough scheme, and as a result, many are struggling to balance the competing priorities of debt management and continued pension scheme membership.
Lockdown has seen trustees having to manage new challenges to maintain appropriate governance standards, such as dealing with the consequences of illness among their own board members, how to conduct regular board meetings and maintain effective communications with their advisers and scheme members.
Taking these factors into account, trustee boards have been forced into making radical decisions in order to be able to continue functioning. There has been a dramatic and immediate shift to accommodate the challenges – and opportunities – of holding virtual meetings. There has been a grim but necessary requirement for them to review risk registers in order to address critical issues that did even exist as recently as six months ago. Another unfortunate development has been a growth in pension scams, as desperate members seek solutions for short-term cash shortages.
However, it has become clear that the industry has responded to the emergency with pragmatism, creativity and professionalism. To date, those working within the pensions sector have shown a commendable capacity to adapt and innovate in response to new challenges. It is entirely likely that many changes adopted over the last month will prove to be permanent as rapidly-improvised solutions prove to be superior to long-established procedures. With this in mind, now is a golden opportunity for pensions professionals to exchange ideas to ensure that we are not only prepared to cope with the immediate emergency, but can look forward to working more effectively in future. Whilst COVID-19 has had a terrible impact on society, one we will never forget, we should be proud of our capacity for resilience. A terrible situation has brought out the best in us.
Last update: 5 July 2021