Industry split on mandatory professional trustees

Industry professionals are divided on whether having a professional trustee should be a requirement for all pension schemes, the Pensions Management Institute (PMI) has found.

In its latest PMI Pulse survey, the organisation revealed that 50 per cent of pension professionals thought that The Pensions Regulator should introduce a requirement for all schemes to have a professional trustee.

However, 77 per cent did not believe that the industry has the capacity to cope with the extra demand, and 80 per cent thought that a requirement for professional trustees would increase costs.

Furthermore, 80 per cent of those surveyed felt that the introduction of professional trustee standards would lead to a reduction in the number of professional trustees in the market.

Despite this, 85 per cent believed that the introduction of standards would improve overall standards and 50 per cent thought that a requirement for professional trustees should be introduced within five years.

Commenting on the findings, PMI president, Lesley Carline, said: “The introduction of professional trustees on all pension scheme boards would be a seismic shift in pensions governance.

“However, our research clearly shows that the industry still seems to be divided on whether or not it is a good idea and the key question around capacity issues is the main obstacle.

“Any move to introduce professional trustees on all scheme boards will indeed take time. Significant expansion of the industry may even lower standards of trusteeship as people with limited pension experience ‘try their hand’.

“As an industry we need to consider all consequences, both intended and unintended, to ensure that our eyes remain fixed on the end goal which is to improve standards of governance and drive better outcomes for all scheme members.”

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