Over the last few years, the responsibilities of trustees have become more clearly defined. In simplistic terms, a trustee must manage and administer trust assets as if they were his own. This suggests a balanced approach which, even in the current climate, must include a good dose of equities.
Nobody seems to have questioned the capacity of pension trustees to choose to hold anything up to 100 per cent of their portfolios in bonds. Does this mean that if the strategy fails or, indeed, underperforms one which has an appropriate exposure to equities that they become personally responsible for failing this basic requirement of trustees?
A convenient matching of liabilities is inadequate excuse for this fundamental principle of being a trustee. Perhaps we should await the first claim from an affected party – be it the employer or potentially a pensioner who believes his benefits would have been greater if due responsibility had been discharged according to the fundamental principle applying to a trustee. Of course, if trustees act responsibly by taking a more realistic and larger view, then continued optimism for sensibly priced equity markets must remain.
Barnstaple, North Devon