Research from the Pensions Management Institute’s (PMI) latest PMI Pulse survey revealed that the pensions industry remains split over the potential requirement for all pension schemes to have a professional trustee, with 50% believing that schemes should have a professional trustee but 78% of respondents recognised that the industry does not currently have capacity to meet the expected demand. Around 50% of respondents felt that it should be a mandatory requirement within five years.
Lesley Carline, PMI’s president, said: “The introduction of professional trustees on all pension scheme boards would be a seismic shift in pensions governance. However, our research clearly shows that the industry still seems to be divided on whether or not it is a good idea and the key question around capacity issues is the main obstacle.”
The study showed that 85% of respondents agreed that the introduction of professional trustee standards would improve standards overall, though 80% believed that this would also lead to increased costs. It also revealed that 80% of participants felt that the introduction of professional trustee standards would actually lead to a reduction in the number of professional trustees in the market.
Concerns were raised over how the industry would need at least four years to prepare if the requirement were to come into force. However, comments suggested that the longer the timescale, the more likely it would not happen, especially with a change in government and new priorities.
“Any move to introduce professional trustees on all scheme boards will indeed take time. Significant expansion of the industry may even lower standards of trusteeship as people with limited pension experience ‘try their hand’,” Carline explained. “As an industry we need to consider all consequences, both intended and unintended, to ensure that our eyes remain fixed on the end goal which is to improve standards of governance and drive better outcomes for all scheme members,” she concluded.