100% of DB pension scheme trustees see room for improvement

Defined benefit (DB) pension schemes trustees are unanimous in their belief that there is room for improvement in the way in which their schemes are run, according to a survey from Hymans Robertson.

The research revealed that trustee confidence in their scheme's effectiveness had seen a decline over the past year, with 100 per cent of trustees agreeing that there is room for improvement, compared to only 10 per cent in the previous year.

In particular, the survey revealed a heightened focus on technology, with nearly two thirds (63 per cent) of DB scheme trustees stating that there is a need to increase reliance on technology and the efficiencies it can bring.

Hymans Robertson noted that the fallout of Covid-19 has prompted a move to embrace technology, pointing out that the proportion of trustees supporting a move to technology was nearly double what it was last year.

Hymans Robertson head of governance consulting, Laura Andrikopoulos, also highlighted the findings as demonstration of the need for “robust annual effectiveness reviews with clear outcomes and action plans and the need to reflect on the learnings from key decisions and processes”.

She also noted that an increasing number of schemes are incorporating scenario exercises into their annual training days, suggesting that these can supplement the traditional effectiveness questionnaire approach and provide real-time tests of how boards react under pressure to emerging situations that require quick reactions.

She continued: “The effects of Covid have created a need for trustees to change and embrace new ways of working and technology is at the heart of this. They must take advantage of the tools available to them, and really look to future proof their ways of working before it’s too late.

“Being confident to place greater emphasis on technology and incorporate its use into decision-making, recognising that we are increasingly living in a digital world, is vital.

“If trustees fail to make this change, they will fall behind in their goals, leaving members to reap the cost and schemes will further decrease in effectiveness.”

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