Half of DB pensions schemes expect to move to the corporate sole trustee model by 2028, according to research amongst finance directors and CFOs of schemes by Hymans Robertson.
More than a third said this change would enable quicker decision-making and lower demands on company management time. Just under a third (28 per cent) said they hoped this move would be to lower costs.
Hymans Roberston points out that while the sole trustee model has advantages, schemes should be mindful that other models also offer similar benefits.
Hymans Roberston head of sole trustee services Shani McKenzie says: “Our research shows there’s a significant appetite for the sole trustee governance model among schemes of all sizes – only a small minority of financial directors and CFOs said they’re unfamiliar with the model.
“Over recent years, corporate sole trusteeship has been growing in excess of 10 per cent year on year. This is due to a mix of factors including improved funding positions, which brought many schemes closer to buyout or needing to consider their endgame options. The skills and experience that corporate sole trustees have in these areas are highly sought after, and one of the main reasons that schemes may also look to this option for additional expertise.
“Skills gaps on trustee boards also created demand for other governance approaches, such as appointing a professional trustee as chair or co-trustee. These options can have the benefit of improving decision-making while allowing a scheme to retain the benefits of a trustee board, such as diversity and direct member representation, for example.”
