Sole trustees roles reach 42% in DB pension schemes – Hymans Robertson

“As schemes wind up and the DB universe continues to contract, it will take notable overall growth in professional trustee appointments to see a material decrease in the proportion of schemes without a professional trustee. 

“That’s not something we’ve observed in the last year, as most of the growth in sole trustee appointments has been fuelled by the conversion of trustee board appointments.”

The report reviewed governance structures at eight of the largest sole trustee providers. 

Hymans Robertson found professional trustees had welcomed The Pensions Regulator’s engagement programme, which focused on open regulatory dialogue. 

Most sole trustee firms had governance processes and controls in place to comply with the voluntary code of practice set by the Association of Professional Pensions Trustees.

She said: “Sole trustee providers are clearly using a range of internal governance structures to oversee the management of the thousands of schemes they govern with the size of the scheme often driving what’s proportionate. 

“Much like trustee boards, the governance arrangements needed for the handful of complex schemes with 10,000 or more members may differ from the governance needed for the 40% of schemes with less than 100 members.

“When it comes to how sole trustee providers structure their teams, our report shows that larger firms tend to take one of three approaches to constructing their delivery teams.”

She added: “We saw a few key differences. Firstly, in how support teams are used, then how governance and secretarial work is separated from trusteeship and also how specialists or in-house advisers are deployed. 

“What was largely preferable across firms was to have one relationship lead for the employer, as relationships are personal but broadly the form of engagement with the employers was similar to how trustee boards would operate.

“In terms of in-house governance approaches of the sole trustee providers we’ve observed two key areas of difference, relating to the breadth of the head of sole trustee’s role and the level of oversight on individual schemes. 

“As sole trustee portfolios have grown, a few firms have noted the need to review and refine their oversight functions to support a larger number of appointments.”