It is a sad fact that since at least the early 2000s the true scale of the pensions crisis means many more individuals than before have had to face a pension scheme wind up. While independent trustees are focused on maintaining the best possible ongoing administration of occupational schemes, they have been called on increasingly to protect members of company schemes from losing everything they have invested over the years in terms of contributions. Salvaging schemes or ensuring that beneficiaries get the most out of a pension scheme wind up in cases of insolvency, where rescue is just not possible, is really where independent trustees can come into their own.

For these reasons the pension protection fund (PPF), the statutory body introduced by the 2004 Pensions Act, in response to the emerging pensions crisis, appoints independent trustees where companies are admitted to its scheme through a qualifying trigger which signals its insolvency. Equally the financial assistance scheme, administered by the same body, and designed in much the same way to protect through compensatory awards as much of an employees pension as possible, relies on independent trustees to bring advanced technical knowledge and expertise gained through intensive practice to complex crisis situations where funds are going under, and individuals security after retirement is in question.

A pension scheme wind up can be difficult to navigate because of the strict procedural requirements set out in legislation, in recognition of the importance of protecting individuals long term interests in the face of economic downturn and stock market restructuring. Independent trustees are being drafted in, in light of these factors, in particular because they are expected by the courts to demonstrate a high level of knowledge and skill with trusts. As the pension protection fund guidance sets out, independent trustees will be held to account for any errors in discretionary matters or breach of trust duties in a way that lay trustees will not. Although all kinds of trustees are required to act in the best interests of the pension fund, independent trustees in their professional status will of course have a great deal more strategic knowledge and technical practice to draw on in order to bring an insolvent scheme through its wind up, to ensure as few losses as possible.

In much the same way, independent trustees have been relied on to alleviate the pensions crisis as far as is possible with respect to insolvency in that a key aspect of such administration is information for beneficiaries. Members of pension funds which have to be wound up need as much detailed guidance and background information on how they can expect to survive in terms of income after retirement. Independent trustees can provide reassurance and expertise, and will be trained in communicating clearly to members their prospects. This means individuals can better judge how to maintain their personal finances in line with the potential outcome of their pension funds wind up, and in turn this mitigates the difficult circumstances playing out during the pensions crisis.