Professional trustee firms have continued to grow in size, with the total number of trustees they employ increasing by 15 per cent over the last 12 months .
In WTW’s annual survey of this industry it said these firms were recruiting heavily to keep up with current demand and anticipated growth in the coming years. Overall new appointments for professional trustees were up by 11 per cent over the year. The biggest growth was been in corporate sole trustee appointments — up by 14% over this period.
WTW says that almost half of DB pension schemes now have a professional trustee, with around half of these appointments (48 per cent) being corporate sole trustees, where one firm of professional trustees take full responsibility for a pension scheme’s trustee board.
WTW said the remainder of professional trustee appointments are for trustee chairs (27 per cent) and co-trustees (25 per cent).
WTW said scheme size is often a big factor in the type of professional trustee appointed. The corporate sole trustee model is growing among smaller schemes (less than £25m in assets) where it dominates, with around three-quarters (73 per cent) of all professional trustee appointments.
Richard Campbell, senior director in WTW’s Professional Trustee Group says: “The growth in Professional Trustee appointments across all areas has continued at an impressive rate underscoring a pivotal shift in pension scheme governance. This trend reflects the increased trust and reliability that employers place in professional governance to help navigate the complex pensions landscape and address governance challenges in an efficient way.”
In order to keep up with current demand for services, and to make sure they have the capacity to meet anticipated growth PT firms have been recruiting heavily from within the pensions industry and beyond.
WTW’s study shows there are more than 380 professional trustees operating in the UK market, a 15 per cent increase in the past year, although this varies significantly between firms.
Due to the high growth in appointments and recruitment, PT firms are selecting talent from a wider variety of backgrounds and experiences than has traditionally been the case for pension scheme trustees.
Actuaries and pension consultants are still the most popular backgrounds to recruit from (29 per cent), but those with HR (21 per cent), finance (13 per cent) legal (13 per cent), investment (13 per cent) and covenant (3 per cent) backgrounds are increasingly sought after.
Growth in the professional trustee industry is also helping to enhance diversity of gender, ethnicity and age within the trustee workforce. This is in line with The Pension Regulator’s ambition for trustees to reflect the profile of the general population more closely.
Currently 42 per cent of professional trustees are female, compared to 28 per cent of the overall trustee population. The ethnic make-up of professional trustees is 91 per cent white, compared with 96 per cent of Trustees overall, and is closer to the overall UK population. The median age of professional trustees is 51, compared with 61 for trustees overall and 41 for the general population.
Campbell adds: “Professional trustees bring a wealth of expertise to pension scheme governance with backgrounds spanning a number of relevant disciplines.
“Looking ahead, we anticipate continued growth in the professional trustee market. This is further supported by endorsements from the DWP and The Pensions Regulator highlighting the important role professional trustees play in upholding high standards of governance, which is more crucial than ever in today’s regulatory environment.”