Case study: Eurotunnel
Eurotunnel established a governance committee for the defined contribution (DC) scheme it opened in October 2006 which replaced its final salary scheme. Its terms of reference include responsibility for monitoring the pension provider and the range of funds, identifying member risks, reviewing member communications and death-in-service nominations, and ensuring the plan is administered within service level agreements.
The committee consists of three or four individuals from different parts of the business who have been appointed by the firm, including a representative of the staff company council and a representative of union Unite, with which the company has a partnership agreement. The committee meets two-to-three times a year and members are entitled to time off work to attend its meetings and to other duties. There is a possibility of including member-nominated staff in the future, according to consultancy Watson Wyatt.
Terry Robinson, director of human resources at Eurotunnel, who is also chair of the committee, says: “The committee meets to ensure the scheme is well run, to monitor the performance of the investment manager, Standard Life, and to review usage of the scheme. A key issue is member communication through which staff are continually encouraged to contribute as much as they can afford thus benefiting from matched employer contributions. As members approach retirement the issues of types of investment, in particular, the alternatives to the lifestyle option, and annuity options will be addressed.”†
The firm also has a process akin to dispute resolution procedures to tackle complaints informally at an early stage and promote open dialogue.