What is a Pension Trustee?

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  • Written By: Jessica Ellis
  • Edited By: Bronwyn Harris
  • Last Modified Date: 04 October 2019
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A pension trustee is a person, usually an experienced professional, who handles the investments of a pension fund. Trustees are generally third parties who do not have a personal interest in the pension fund, but are hired as outside executives of the fund. A pension trustee is entrusted with an incredible amount of responsibility, since one very bad move could destroy the retirement plans of ever person involved in the pension scheme.

Many workplaces offer pension plans to full-time employees as a form of benefits. In addition to helping increase workplace retention, pension plans help employees save for eventual retirement or future dreams. Companies typically hire a pension trustee from outside the company to serve as the main administrator for the pension fund. Having a group pension fund managed by a pension trustee is sometimes very beneficial to employees, as a larger amount of investment capital has the chance to return much larger gains than each employee's singular pension fund alone.

Pension trustees are often administrative professionals, rather than investors or financial experts. Many trustees will hire a financial manager to do the day-to-day investing, though the trustee remains ultimately responsible for the performance of the fund. This means that the trustee will likely work very closely with the manager to try to help ensure the best possible performance. Trustees who are investment professionals may choose to waive hiring a manager and do the daily investing themselves.


One key job for a pension trustee is to set investing policy for the fund. This may involve the division of capital between markets, such as putting half toward stocks and half toward the foreign exchange market. Policies created by the trustee may also eliminate certain investments from consideration, such as forbidding investment in junk bonds. These policies must be flexible, as the market will shift with time. A good pension trustee will always have his or her eye on the market in order to keep policies current and successful.

Trustees are also the link between the investors and the funds, and must provide regular updates on the performance of the pension plan. Good communication between the trustee and his or her investors is very important, as it can ensure that people know what the plan is doing and how successful it is becoming. Trustees may provide this information through quarterly or regular newsletters, reports, or meetings. As recordkeeper for the pension fund, the trustee must also create easy access to performance and investment records for investors to peruse.


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Post 2

How does the Trustee respond to a member when they become upset by poor performance. What does the Trustee say to them?

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