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Bulletin Board The following text is a transcript of Alan Herbert's speech at opdu's recent Annual Meeting and 10th Anniversary It gives me much pleasure to present my report on this special occasion as we celebrate the tenth anniversary of the establishment of opdu. It therefore might be appropriate to spend a few moments reflecting on the first ten years of opdu’s life. It was on 3 April 1997 that opdu was launched just three days before the main provisions of the Pension Act 1995 came into force following a gestation period of some eighteen months. I had had my first discussions on the idea of setting up a defence union for those involved in running occupational pension schemes with Robin Ellison in October 1995 following the enactment of the Pensions Act. I am very pleased that Robin is able to be with us this evening in his capacity as Chairman of the NAPF. In 1996 Thomas Miller & Co Ltd was approached given its long tradition and reputation in providing a full range of specialist insurance management services. It was selected to develop the concept because of its expertise in managing mutual insurance companies in the international transport sector and in more recent years providing a number of UK based insurance product and risk management services, tailor made to the requirements of professions in the UK. The Napf facilitated a meeting a meeting of representatives from a wide range of pension schemes and pension professionals to explore proposals for establishing something similar to the medical defence union. A Steering Committee of pension professionals was formed under my chairmanship to work with Thomas Miller to design what was to become opdu. At the inaugural meeting of the Steering Committee Jonathan Bull and Ian Jarrettt of Thomas Miller put forward proposals for a unique insurance facility. This facility was structured to provide trustees and those involved in the administration of occupational pension schemes with comprehensive insurance combined with the benefits of a traditional mutual insurance association with its emphasis on risk management. opdu responded further in this area in 2000 by setting up a separate subsidiary Trustee Risk Management Ltd to provide a risk management service to insured members of opdu and non members. The first insured members who signed up shortly after the launch were J Sainsbury plc and Philips Electronics UK Ltd. Today opdu has 219 members covering 350 schemes with several thousand trustees receiving the benefit of the opdu’s services and cover. Trustees, pension managers and other individuals connected with the running of the schemes continue to receive cover after they have retired. In 1998, as the membership grew, an Advisory Council was elected from the opdu membership to represent the interests of the insured members, to work with Thomas Miller to ensure opdu was as proactive as possible to meet the needs of its membership and to help raise standards in the management of pension schemes. I was invited to become its first Chairman. 1999 saw new cover introduced including increasing the period of retirement cover for individuals from 10 years to 12 years and the introduction of Litigation Costs Extension to pay costs in seeking directions or a declaration from the Courts. In 2001 opdu hosted a discussion forum on “Pensions Administration – Managing Trustees Expectations” in conjunction with Jocelyn Blackwell of Dunnett Shaw now Higham Dunnett Shaw. I am delighted to see her here this evening. This led to the formation of the Raising Standards of Pensions Administration Group. I am pleased to see that it is flourishing. I understand that in early May they will be giving an update on their industry wide Member survey and launching a proposed General Statement of Administration Standards. The survey gives them the measures to see if the initiative is really making a difference. The Standards will offer trustees and employers a framework to define what good practice really is. I would like to congratulate and thank all those involved with the Group on the work they are doing. I am sure David Laverick and Malcolm McLean will be pleased to see some progress in this area as they regularly have to deal with disputes arising from poor standards of administration. In opdu we also have the same experience of having to deal with claims arising from poor administration. 2001 also saw “after-the-event” legal costs cover launched for trustees who are advised to pursue an action against a third party. This enabled trustees to buy cover to protect the fund assets before embarking upon litigation against a third party. It also saw the first major claim of approximately £600,000 arising from a mis-description in an explanatory booklet. By 2002 opdu members had assets of some £75bn under management. The first claim reports were issued on a non-attributable basis summarizing the details of claims to assist schemes with risk management. In 2003 opdu supported the initiative to establish a Pensions Archive to capture the story of the development of pension provision in the UK. I and my colleagues on the board of The Pensions Archive Trust are indebted to opdu for its support. We are now working with the London Metropolitan Archives run by the City of London Corporation to set up the Pensions Archive there and we are looking to take in the first collections over the coming months. opdu also in that year participated in the development of the voluntary Trustee Code of Practice developed by the group set up by Brian Holden who is Chairman of opdu’s Trustee Risk Management advisory service. By 2004 the membership had grown to 150 with scheme assets of approximately £110bn under management. During that year the Trustee Management Service started to hold regional seminars in conjunction with the DWP to assist trustees manage change in the light of the new Pensions Act. 2005 saw the Trustee Risk Management service hold a series of interactive trustee workshops in conjunction with The Pensions Regulator to assist knowledge and understanding in the new regulatory and legislative environment. It also with the NAPF, PMI and TUC responded to the request to nominate three members for a trustee panel established by the Pensions Minister. opdu has received some very positive feedback from its members who are participating on this panel on the value of it. The year also saw opdu granted FSA approval as an authorized body enabling trustees and employers to deal with it direct. 2005 was the year in which insurance cover for professional trustee liabilities following the winding up of a pension scheme was launched In 2006 opdu was nominated for the Engaged Investor Trustee Awards for the private sector company demonstrating the most commitment towards trustee education. The financial limits for the 12 year contingency run off cover for retired trustees/ pension managers was increased as was the cover provided for those seeking directions or a declaration from the Court. The opdu Pension Support Bond was launched during the year. This gives comfort to the trustees of a scheme that the funding of a deficit will be met and comfort to the employer that if over funding occurs an amount equivalent to the excess assets can be returned to it. I hope from the foregoing you will see that opdu is not just a conventional insurer of trustee liability risks but that over the last ten years since its formation it has played an active part in many aspects of pensions including supporting trustee risk management and the raising of standards generally, both in trusteeship, pensions management and pensions administration. I hope that it will continue to do so. I would like to thank Jonathan Bull and his team for their efforts on opdu’s behalf and wish them every success in meeting the challenges which lie ahead. I would also like to thank Merrill Lynch for hosting this special anniversary event and reception this evening. I would particularly like to thank Eli and Yally Avrahampour of Merrill Lynch for making it happen. Finally, for me in Downing Street tradition I would like to announce that this will be my last opdu Annual Meeting as Chairman of the Advisory Council and that I shall be stepping down at the next Council meeting when my successor is elected. I would like to thank all my colleagues on the Council for their support during my term of office. I would also like to thank you for your interest you have shown in opdu by attending this evening. This concludes the formal part of the annual Meeting and I would now like to ask our first speaker Lawrence Churchill, Chairman of the Pension Protection Fund to address us...
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Ladies and Gentlemen 
