Professional trustees not essential for every board, say chairs

Just 26 per cent of trustee chairs think that professional trustees are essential for every pension scheme board, according to a joint industry report.

The report, with insight from the Association of Member Nominated Trustees, Pensions and Lifetime Savings Association (PLSA) and the Pensions Management Institute, and led by Mallowstreet, also found that under half (44 per cent) of lay trustees deemed professional trustees as being needed on the board.

Conversely, the report, which surveyed 200 UK pension professionals, said 56 per cent of independent trustees thought a professional trustee was a necessary fixture on the board.

Back in July, The Pensions Regulator (TPR) proposed that every board should have a professional trustee as part of an effort to ensure that all savers can enjoy membership of well-run schemes.

Respondents defined a professional trustee as somebody who was not necessarily paid for their work but possessed the correct experience and qualifications to add value to schemes without additional support.

The joint report claimed this signalled a need for improved trustee training programmes rather than further prescriptive regulation from TPR.

However, just 10 per cent of trustees considered training to be among their top three priorities over the next two years.

Instead, the report stated that long-term funding targets and investment strategy had received more attention, though it argued that, due to the positive impact extra training and qualifications have, “training for trustees should be a greater focus for UK pension funds”.

The survey also found that roughly half (48 per cent) of the UK pensions professionals contacted had obtained just a single accredited qualification.

The most held qualification was the TPR trustee toolkit, a free online learning programme, which had been passed by 71 per cent of respondents, while 30 per cent had a PMI certificate.

One in 10 of the surveyed pension professionals held zero accredited qualifications, with pensions managers being particularly unlikely to have earned any certificates.

The joint report also examined the diversity of pension professionals’ career backgrounds, finding that the largest contingent (24 per cent) had previously worked in finance and accounting.

Elsewhere, 16 per cent came from blue-collar jobs, 13 per cent from white-collar positions, 11 per cent each from pensions management and consulting backgrounds, and 8 per cent from other areas.

However, there was far less diversity among investment officers and pensions managers, with 71 per cent of the former coming from investment management backgrounds and 60 per cent of the latter having come through a pension management background.

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