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Barnett Waddingham are pleased to continue as the research partner for the 2020 edition of the Winmark Pension Chair Remuneration Report. It was good to see the scope of the survey and the number of respondents increase once again this year, with 120 trustees of occupational pension schemes across the UK taking the time to contribute to the survey, representing pension funds with a combined value exceeding £325 billion.
The trend of increasing pension trustee remuneration continues as shown below, although compensation over the last twelve months has not increased in real terms as it had done over the previous three years, and the majority of Trustee Chairs now expect remuneration to remain stable in the current environment for the next year:
One key theme from last year, which remains in evidence, is that Trustee Chairs continue to look for increased diversity in their Trustee Boards, particularly by age and gender. However, there is no evidence of any positive movement in this area over the last 12 months with only 14% or respondents being women (which is actually a 4% reduction from last year), 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.
Hopefully efforts in this area can persist, as two thirds of Trustee Chairs continue to assert that trusteeship presents attractive future development opportunities for candidates (a similar percentage to last year). There continues to appear to be no barrier to future diversity in terms of a gender pay gap within trusteeship, with the women Chairs surveyed receiving higher average remuneration than the men, as has been the case throughout the last five years of the survey, as shown below:
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.
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, two thirds of chairs continue to see regulatory demands as an ongoing priority, a similar percentage to last year, and scheme’ ESG investment policies have become a priority for more Chairs, as shown below:
In this context, it is interesting to see the responses to questions around the impact of the ongoing Covid-19 pandemic. Around half of Trustee Chairs expect to have to prioritise consideration of the pandemic’s impact on employer covenant strength or funding pension scheme deficits; around a third expect to have to consider the impact on administration or governance; but very few currently expect to have to change their long term goals as shown below:
This suggests to me that existing strategies have shown a high level of resilience in general, although clearly a number of pension schemes will be focussed on the financial consequences of Covid-19 for some time to come.
It will be interesting to see how Trustee Chairs’ priorities continue to evolve in future in the wake of the Covid-19 pandemic. And hopefully efforts to increase diversity and inclusion can be ramped up and we can start to see a more diverse trusteeship body tackling the challenges of future years.
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