Issues inherent to management committees and different models for addressing those issues Fiona Renton

Some Of The Issues Being Raised Are To have a management committee or not? How a management committee derives its powers? What functions a management committee typically performs.

To Have a Management Committee or Not? Are you in a Type A or Type B umbrella fund. What does the legislation say about management committees. Composition of a management committee. Other factors to think about for the structure and running of a management committee.

How Does a Management Committee Derive Its Powers? Section 70 (2) (a) The board may, in writing and in accordance with a system of delegation set out in the rules, delegate any of its functions under this Act to a person or group of persons, or a committee of the board, subject to conditions that the board must determine.

How Does a Management Committee Derive Its Powers? cont… (b) The board is not divested or relieved of a function delegated under paragraph (a) and may withdraw the delegation at any time.

How Does a Management Committee Derive Its Powers? cont… Delegation occurs where one party transfers responsibility for performing a particular duty to another party. The obligation is transferred but not the rights. Delegation occurs in contracts and an administrative law context.

How Does a Management Committee Derive Its Powers? cont… Administrative law refers to the decision making of government and its agencies. Trustees do not have time and expertise to perform all tasks to run the fund. Delegate to professionals or service providers and monitor carefully.

How Does a Management Committee Derive Its Powers? cont… Proper and effective delegation should take place via a written document. Comply with fund rules and Pension Funds Act. Specify tasks to be performed and how they are performed.

How Does a Management Committee Derive Its Powers? cont… Cannot delegate a task which requires specialised skills or unique characteristics. Trustees have a very unique characteristic they are FIDUCIARIES. They represent the best interests of members.

How Does a Management Committee Derive Its Powers? cont… Can be held personally liable. Highest standard of conduct. Can a trustee delegate a fiduciary responsibility to a management committee. Even if they delegate functions, they retain ultimate responsibility and liability.

What Functions A Management Committee Could Perform? Employers should be considering: Does the fund have management committees? How are they structured? What do they do? How are they supported?

What Functions A Management Committee Could Perform? cont… Advisors Fund appointed Employer appointed Fees Liability

What Functions A Management Committee Could Perform? cont… Investments. Risk. Communication. Contributions. Death Benefits.

What Functions A Management Committee Could Perform? cont… Trustees need to think carefully about tasks to be performed by a management committee. Management committees need to think carefully about the burden and liability associated with performing the tasks.

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