Governance - Trustees
Each of the BAE Systems pension schemes is managed by its own trustee company set up especially for this purpose. The Boards are run by Directors who are appointed by the Company, by the members and the pensioner population. The Trustee is the body appointed to run the schemes in line with the Rules (the schemes' formal documents) and to look after members interests. The schemes are registered pension schemes for the purposes of Section 150 (2) of the Finance Act 2004.
The Trustee has a number of responsibilities and must always act in the best interest of all scheme beneficiaries, this includes deferred members, pensioners and beneficiaries as well as in service members.
Specifically the Trustees' main responsibility is to pay all of the benefits as they fall due under the Rules of the scheme.
The Trustee Boards meet regularly throughout the year to discuss their scheme. They review any issues and check that they are continuing to meet their obligations to members. The Trustee Boards take advice from specialist advisers on certain topics, for example, the investment strategy.
The Trustees have a number of sub-committees which help the Trustee Board to consider matters in fuller detail.
One of the keys to good governance is ensuring adequate Trustee knowledge, training and performance evaluation. All the trustee directors have the skills and knowledge necessary to carry out their role effectively. New Trustee directors complete a fundamentals of trusteeship training course and are required to undertake the Pensions Regulator's on-line training known as the Trustee Toolkit. Suitable initial and on-going training is also provided. All Trustee Directors assess their training needs on an annual basis to identify their training needs and formulate their annual training plan with the support of Group Pensions and other advisors.
The Trustees have a duty to ensure that:
The Scheme operates in accordance with the Trust Deed and Rules
Its assets are invested in accordance with the Trust Deed and Rules, any overriding legislation and according to the Statement of Investment Principles
They aim to safeguard the accrued benefits of the Scheme’s beneficiaries - ie the benefits that all members, active, deferred and pensioner, have already built up through membership of the scheme and paying any contributions into the Scheme in the past.