UK- The qualifications of UK pension fund trustees remain insufficient and are likely to come under increasing examination, according to research by Watson Wyatt and the Cranfield School of Management.
The survey, which examined the management skills of 106 UK pension fund trustees, supports Paul Myners in backing a new culture of fund governance and concludes that a trustee’s role should be similar to that of a non-executive director.
Respondents feel they possess sufficient management experience but the survey mirrors the conclusion of Paul Myners’ report that trustees are insufficiently qualified. It found that few have earned any form of investment qualification or gained trustee PMI designation.
Member-nominated trustees are the least equipped with 31% of those surveyed reporting no relevant qualification while 41% only have what the survey calls tentatively related management of investment qualifications.
More encouraging is evidence of an increase in the use of investment sub-committees. Over 60% of respondents use them and most agree they will become more popular and recognised as best practice.
As for analysing trustee performance, more that 35% of trustees have neither undergone nor undergo a performance review. In addition, only 17% said there are measures in place to review trustees’ performance.
"Trustees are well motivated people who are generally serving the UK pensions industry well," said Philip Robinson, a senior consultant at Watson Wyatt. "Trustees' capabilities are impressive but their competencies may increasingly be examined.
“More needs to be done in order to cope with the demanding and complex pensions environment that most agree is emerging. Greater competency development, more delegation to expert advisers and the institutionalising of investment committees are clear needs.”