Good governance of pension schemes “should never be a tick box exercise, Sackers and Winmark has stated.

In a newly published research report titled Effective Governance – the Art of Balance, Winmark and Sackers noted that governance is a “balancing act” and one that necessitates flexibility so that schemes can adapt quickly to change.

The survey of 84 pension schemes and 13 in-depth interviews with chairs of trustees and other pensions experts found that although important, compliance is not the primary focus of governance, and spending too much time on compliance could distract from other governance priorities that lead to improved member outcomes.

The research also showed that skills and ability to make a progressive contribution to the trustee board are valued more than pensions knowledge.

Professional trustees are viewed as providers of expertise and experience, while lay trustees are useful for their “pragmatism, understanding of the members and knowledge of the employer,” Sackers and Winmark noted.

From its findings, the report published key recommendations for trustees. These include, the need for trustees to ensure there are no blind spots and that they review any knowledge and skills gaps, which can be improved through training and regulatory guidance.

In addition, the two firms suggested that for both defined benefit and defined contribution schemes, trustee boards should work on strengthening their working relationships with employers to build engagement and information sharing. Furthermore, it was advised that trustees should introduce metrics to track performance in order to ensure that providers offer value for money.

“It is good practice to review the market and draw on the sector expertise of independent trustees and pensions managers to assess and compare value and performance,” the report said.

Winmark, senior research manager Suzanne van Montfoort, commented: “Boards of trustees are performing a real balancing act. To run an effective scheme that achieves positive member outcomes, they need to perform a diverse range of tasks with limited resource, whilst navigating often complex employer and scheme dynamics. We are grateful to the trustees and other experts who shared their challenges and successes and hope this study will support trustee boards in their endeavours to raise schemes’ effectiveness through improved governance”.

Sackers partner Helen Baker, added: “We believe that these findings will help schemes of all sizes and structures to identify the cornerstones of good governance and decide where they want to focus going forwards. There can be no one size fits all approach in governance. Governance is a very practical subject and sharing experience enable all schemes to benefit from insights that reflect the realities of running a pension scheme.”

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