The exodus of pension trustees is set to gather pace with the number planning to step down within a year up by a third.
Research for Charles Stanley found that 40% of professional DB pension trustees plan to step down within the next year and as many as 80% plan to step down within 3 years.
The research was carried out by Charles Stanley’s Fiduciary Management arm.
According to the wealth manager’s study “overly burdensome” regulation is the main reason why trustees are choosing to step down. Some 28% of professional trustees cite this as a major reason for leaving.
The 80% planning to step down within three years is a large increase from the 62% of pension trustees who said the same in Charles Stanley’s inaugural research last year.
If the figures are proved correct, pension schemes will find themselves with a sudden gap in professional oversight, Charles Stanley warns.
The research polled 70 professional DB trustees involved with schemes with a total AuM of more than £60bn.
According to the poll, some 40% of trustees said they planned to step down in 7-11 months and 40% planned to step down in 1-3 years. The final 10% plan to step down in 4-5 years.
Asked about reasons for quitting, 28% said regulations were too burdensome although this is down from the 56% who attributed their exit to this last year. Some 20% said that reporting requirements were too onerous.
An increased proportion of trustees are retiring (35%) or reaching the end of their tenure (27%), while 28% have struggled with the transition to remote work.
Year-on-year comparisons of reasons why trustees are planning to step down:
|
Reasons for Stepping Down
|
2021
|
2022
|
|
The regulations are too burdensome
|
56%
|
28%
|
|
I don’t feel I have the knowledge to perform the role
|
44%
|
22%
|
|
The reporting requirements are too onerous
|
41%
|
20%
|
|
I have health concerns
|
29%
|
30%
|
|
It’s taking up too much of my time
|
24%
|
23%
|
|
I’m retiring from all work
|
18%
|
35%
|
|
It’s the end of my tenure
|
12%
|
27%
|
|
I’ve struggled doing the role remotely
|
6%
|
28%
|
|
There are no key motivations in my decision to step down as my position as a trustee in the next 3 years
|
0%
|
0%
|
Source: Charles Stanley Fiduciary Management / Censuswide
Bob Campion, senior portfolio manager, Charles Stanley Fiduciary Management, said: “Professional Trustees hold a critical position on the board as trusted and expert voices in deciding the best route for the scheme – from the asset allocation, to the payments of benefits – which has only become more entrenched as the landscape for DB schemes gets more complex.
“However, with a notable rise in the number of DB pension scheme trustees looking to step down from their tenure, pension schemes could swiftly find themselves in a sudden shortfall of professional oversight. It’s vital that the industry puts the work in now to find out what’s driving the move, and also tries to attract and retain the required new influx of talent.”
• Research was carried out by Censuswide among 70 professional pension trustees of UK DB pension schemes, who manage an average of five DB pension schemes each, with an average scheme size of £370m. The survey was completed between June and July.
