A day in my life at trustee training

I joined the PLSA only recently. As someone who hadn’t worked in pensions before, I didn’t know my DB (defined benefit) from my DC (defined contribution). I knew what an annuity was, but not how a trustee and a fund interacted, and as for the layers of governance and other issues around being a trustee, I was clueless. 

This was one of the reasons why, on a cloudy September day, I attended Trusteeship – part 1: the theory. 

A librarian, a financial director, a writer, and more 

My fellow attendees were all new trustees with less than a year’s experience, most had only attended a couple of trustee board meetings, and came from a range of backgrounds. 

Some had professional financial knowledge, while others were still getting up to speed with investing and were just as baffled as I was by the concept of discount rates, which I now know is the value today of future cash flows – something particularly important in DB, where you have to meet specific amounts to pay pensions. For example, if I need £100 in a year’s time, I might only need to allocate £97 now thanks to interest and other factors. 

My newfound mathematical confidence quickly evaporated when I tried to calculate compound interest for a sum on one of the presentation slides, and I reminded myself that this is precisely why pension schemes have advisers and actuaries.

This is an excerpt, read the full article in the member area.

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