| DB pension trustees walking away from ever greater burden Who would want to be an investment professional attempting to make sensible decisions on their investors’ behalf in a world of ever greater regulatory burden, myriad asset classes and an unpredictable geopolitical and macroeconomic environment?
Well, the answer is certainly not defined benefit (DB) pension trustees who are leaving the profession in their droves with almost three-quarters (73 per cent) planning to step down from the trustee board within the next three years.
Research from Charles Stanley Fiduciary Management reveals just under a third of those stepping down have been driven out by onerous reporting requirements, while 22 per cent say the regulations are too burdensome, and the same number feel they lack the sufficient knowledge to carry out the role.
It seems perverse that the very reasons corporate sponsors need professional trustees to help manage their DB
pension schemes, are the same reasons this much needed support is exiting the field.
And professional trustees are quitting just as demand for their services is increasing. Over two thirds (68 per cent) of corporate sponsors of DB pension schemes say it is likely that they will increase their use of professional trustees in the future, according to a survey published this week by Hymans Robertson.
This potential skills and knowledge gap comes at a time when the UK government is desperate to shore up the nation’s occupational schemes and ensure they are better equipped to take on more complex and illiquid asset classes.
The Department for Work and Pensions and The Pensions Regulator plan to create a register of trustees who are able to support schemes that "require additional support to fulfil their obligations", but unless it does something to stem the exodus of professional trustees, this sounds like an impossible task.
Elsewhere
there are efforts to bolster investment professionals’ knowledge, with the CFA Society announcing the launch of the Certificate in Impact Investing, which it says provides a "comprehensive introduction to the fast-growing field of impact investing".
This is certainly a pertinent qualification given the recent move away from the generic world of ESG investing to more targeted strategies that endeavour to have a demonstrable positive impact on the world in addition to delivering returns to investors.
It is important that as impact investing grows, the industry uses consistent in terminology and metrics, and avoids the vagaries and contradictions that the responsible investment sector has become associated with.
Let’s hope this qualification goes some way to providing much needed harmonisation.
Gill Wadsworth, Editor
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