Although the majority believe they will not need to change their long-term goals, half of the respondents (50%) expect to have to prioritise consideration of the pandemic’s impact on employer covenant strength or funding pension scheme deficits; with one third (33%) prioritising the impact on administration or governance.
Salary levels
Pension Chair remuneration has remained static over the past year, following a three-year period with average increases of 3.3% per year in real terms. Salary expectations for the year ahead, with 58% expecting no change, 34% expecting an increase and 7% expecting a decrease, are at similar levels to last year, which suggests that Covid-19 has not yet had a direct impact on the remuneration landscape.
Most respondents (61%) also expect compensation for the year ahead to remain static, perhaps reflecting the potential impact of Covid-19 on remuneration.
Diversity
Pension scheme trustee chairs are looking for an increasingly diverse range of skills as well as diversity by age, gender and ethnicity for their trustee boards in the future. However, there is no evidence of any positive movement in this area over the last 12 months with only 14% of respondents being women - which is actually a reduction from last year (18%) - despite 40% of schemes having taken active steps to increase diversity in the past 12 months. Chairs cite a lack of candidates coming forward as the main barrier to increasing diversity.
Further findings from the report
The report goes beyond the headline data to explore current trends in attraction, retention and development of pension board members.
Around a third feel their remuneration does not adequately reflect the complexity and pressures of the role, and an increasing proportion, 34% compared to 24% in the previous year, feel pay levels are a barrier to attracting skilled chairs and trustees.
An increasing proportion also feel they do not have enough time to meet the demands placed upon them, 10%, up from 5% last year.
Danny Wilding, Partner at Barnett Waddingham, said; “In terms of this year’s priorities, it is clear that Trustee Chairs remain focussed on the key high-level strategic issues of de-risking and endgame planning. Alongside this, regulatory demands are an ongoing priority, and schemes’ ESG investment policies.
“Existing long-term strategies appear to have shown a high level of resilience to the ongoing pandemic in general, although clearly a number of pension schemes will be focussed on the financial consequences of Covid-19 for some time to come.
“There is also a clear endorsement of the benefit of professional representation on Trustee Boards this year, with over two thirds of Trustee Chairs suggesting professional trustees can improve standards of governance and member outcomes.”
John Madden, Research Director at Winmark, said; “Attracting suitable candidates to apply for trusteeship positions is the key barrier to achieving greater diversity. A sector-wide effort to encourage greater interest, engagement and involvement in trusteeship roles will be required to increase the applicant pool in the long-term.
“In this current environment Trustees’ communication channels need to adapt to the changes by reflecting on the changing relationship between employment, family life, leisure and retirement.”
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