Under the Segregated Pension Fund, the following are the critical services that need to be performed/engaged:
- Administration and Investment Services
- Auditing and Accounting Services
- Actuarial Services (whenever the fund requires an Actuarial opinion)
- Property Management Services (where the Fund Assets include Property)
- Bank Services, Legal Counsel and Custodian Services
*These functions are the responsibility of the Trustees
Segregated Pension Fund arrangement also tends to immediately suffer from low growth at onset as they compete for investment opportunities. They however recover from this once the investment mandate is achieved (which could take some time depending on availability of investment opportunities).
The investment spread is limited by the assets of the fund and can become a limiting criterion in achieving competitive investment performance. This is the reason the level of assets is a critical criterion in deciding to move to a segregated fund arrangement.
It must be emphasized that trustees are accountable to the members of the Fund and can be sued by members if their actions have prejudiced the member’s interests. This is usually mitigated by contracting other professionals to guide trustees. However, actions due to Trustee negligence or misconduct remain the liability of the Trustee.
Notwithstanding the fact that the trustees have contracted other parties to provide these services, the responsibility to ensure that the fund continues to provide members with real growth of their capital, that the data management is dependable and of high integrity, that members obtain communication regularly and that the fund assets are secure, remains with the trustees.