UK - The number of UK occupational pension schemes employing at least one independent trustee has increased to 44% in the last year, Mercer has revealed.
Findings from the consulting firm's annual trustee survey suggested there is an "underlying move" by pension schemes towards an increased use of independent trustees, with 60% of larger schemes - those with assets over £1bn (€1.17bn) - appointing an independent trustee, compared to 50% in 2007.
Mercer said its experience supported the research indicating more schemes are turning to independent trustees, and added "our expectation is that this trend will continue", even though only 3% of respondents said they would probably or certainly appoint one in the next few years, and and 22% are considering the use of 'professional' trustees.
Rachel Brougham, principal in the governance team at Mercer, said: "Numerous issues are pushing the industry towards independent trusteeship. Schemes are recognising that trustees should regard themselves as directors of multi-million pound businesses."
The survey of 158 schemes, 90% of which were defined benefit (DB), also highlighted more trustee boards are responding to The Pension Regulator's focus on good governance, as the number of schemes with a sub-committee devoted to governance has almost doubled in the last 12 months from 25% to 41%.
Brougham said: "We can see increased training, better governance and better structures being put in place. More thought is also being given to board structure and performance evaluation."
That said, the findings revealed 55% of schemes do not have a role description for trustees, while 71% admitted to not having a specific description for the duties required of a chair of the trustee board.
In addition, a quarter of respondents revealed they do not assess the performance of trustees, in one form or another, although of the 75% that do monitor performance at least 47% of trustees evaluate themselves, while 25% of respondents placed responsibility on the chair of the trustees and 8% on the employer, with the remainder sharing the assessment between each other or with external advisers.
Results of the survey also highlighted the majority of schemes - 68% - undertake generic trustee training, as 69% of trustees spending between 1-3 days on training, while 19% spent 4-6 days, and just 3% spent more than a week in training.
On average, Mercer found, UK schemes have an average of seven trustees, although larger schemes tend to have larger boards than smaller schemes, with 95% of boards including active members, and 68% allowing pensioner trustees.
However, while the results revealed the number of schemes paying at least one trustee has increased from 47% to 59% in the last year, larger schemes are more likely to have a remuneration policy - 74% of pension funds valued at more than £250m, and 84% of schemes with more than £1bn assets.
The report did highlight an increase in the number of smaller schemes paying trustees - from 35% to 47% - but it pointed out if the trustees are not independent then pensioners are more likely to receive paymnet than active members, with an average payment of £9,000.
Brougham said: "The thorny issue of remuneration remains. It may be that trustees are becoming more demanding as their role becomes tougher. There remain concerns among trustees that a call for payment would be met with a demand that the trustee demonstrate a higher duty of care."
But she added overall trustee broads are responding to increasing pressure by "dealing with their schemes in a more business like manner."
"A change in approach will not happen over night but it is reassuring to see this long term trend continue," said Brougham.
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