Pensions - Articles - Half DB pensions to move to corporate sole trusteeship

 Main drivers for the move include less company management time (36%) and quicker decision-making (36%) and lower cost (28%)

 Over a third (36%) said that they see quicker decision-making and lower demands on company management time as the main benefits. However, while using the sole trustee model has many advantages, schemes should be mindful that other models also offer similar benefits, says the leading pensions and financial services consultancy.

 Commenting on why the corporate sole trustee model is attractive to DB pension schemes, Shani McKenzie, Head of Sole Trustee Services at Hymans Robertson, said: “Our research shows there’s a significant appetite for the sole trustee governance model among schemes of all sizes – only a small minority of financial directors and CFOs said they’re unfamiliar with the model. And, over recent years, corporate sole trusteeship has been growing in excess of 10% year-on-year. This is due to a mix of factors including improved funding positions, which brought many schemes closer to buyout or needing to consider their endgame options. The skills and experience that corporate sole trustees have in these areas are highly sought after, and one of the main reasons that schemes may also look to this option for additional expertise.

 “Skills gaps on trustee boards also created demand for other governance approaches, such as appointing a professional trustee as Chair or co-trustee. These options can have the benefit of improving decision-making while allowing a scheme to retain the benefits of a trustee board, such as diversity and direct member representation, for example.”