The trustee’s mantra to tackle the impact of Covid-19: Don’t panic!

10 Jun 2020

Stephen Fallowell is a committee member of the Association of Member Nominated Trustees

In Douglas Adams’ wonderfully satirical novel The Hitchhikers Guide to the Galaxy the eponymous book is a universal best seller for two reasons; firstly it is slightly cheaper than its rival publication, The Encyclopaedia Galactica, and secondly, it has the words ‘Don’t Panic’ emblazoned on its cover in big friendly letters. This is a great comfort and sound advice in a dangerous universe.

In a world of uncertainty, with governments and individuals trying to plot a future whilst griped by a pandemic, these two words seem even more pertinent.

Pension trustees need to adopt these two words as their mantra as they cope with the uncertainty of the present while planning the future post the coronavirus.

The Pension Regulator also seems to have picked up this theme with the excellent guidance on its website. This basically covers three main areas:

      1)      Operational

That all benefits of whatever nature should be paid on time

      2)      Members

Pension funds should be communicating with members to provide guidance, support and reassurance. They should also be warning of the increased presence of scammers who are looking to exploit the situation.

      3)      Financial pressure

Deficits in defined benefit pension funds will increase but the level of that increase will depend on the exposure of the fund and the preventative measures already in place. Covenants will need to be scrutinised, with any requests for easing deficit reductions being reasonable, appropriate and justified.  


The regulator does not give advice on which investment route to take primarily because that is not its function, but is also due to pension funds being at different stages of maturity and thus having differing needs and possible solutions to issues. Nevertheless, its general view is ‘Don’t Panic!’

Doing what is needed now may seem self-evident but planning what the ‘new normal’ will look like after the pandemic is more difficult. Prognosticators are already mapping out different paths but seldom are they proven accurate in their forecasts and it may be, as Daniel Defoe found commenting 50 years after the last great plague of 1665, that very little changed and effectively business returned to normal. However, there are indications that changes which were already in train have been accelerated by the effects of pandemic.

Companies are bringing forward their automation plans within weeks that were planned for years ahead. Microsoft’s chief executive has stated: “The past two months have seen digitisation progression that would ordinarily take two years generated by the demands of remote working and the need for accurate data and intelligence.”

A decline in demand for fossil fuels may be accelerated by the changes in air, sea and car usage.

Price and value will come under scrutiny. For instance; are we willing to pay significantly more for a Premier League footballer than a front line nurse? Perhaps there will even be greater scrutiny on investment managers value?

So where should the focus lie? The answer is in doing what trustees (particularly MNT) do best – challenging and asking awkward questions, but above all DON’T PANIC!

More Articles



Subscribe to Our Newsletter

Sign up to the portfolio institutional newsletter to receive a weekly update with our latest features, interviews, ESG content, opinion, roundtables and event invites.

Magazine Subscription

Institutional investors qualify for a free of charge subscription to portfolio institutional. Please fill in your details to request your copy.


Magazine Subscription

Institutional investors qualify for a free of charge subscription to portfolio institutional. Please fill in your details to request your copy.

We use cookies to improve your experience on this website. For more information, please see our Privacy Policy.