Pensions - Articles - Trustees should use their voice to challenge member outcomes

 Kim Nash, Managing Director at ZEDRA, commented: "The industry has seen a significant increase in pension schemes completing buy-out transactions across the UK. This shift is having a noticeable impact on the balance of investments in the market, and on broader systemic risk. This raises important questions that need to be considered. For years, and under their management, trustees have embedded sustainability considerations into investment strategies, setting clear stewardship priorities and pushing for responsible asset management. At the point of risk transfer, trustees cease to have control over the assets held and the stewardship principles being adopted. Historically, price has been the dominant factor in insurer selection, but we are starting to see a change in that. Schemes are now better funded, reducing the need for employer top-ups, and trustees are therefore able to focus on other critical factors like member experience, cultural alignment, and sustainability credentials. This is the last chance for trustees to really push for full transparency on how members will be dealt with and what the member experience will look like post transaction.

 Trustees should also leverage this position to ask questions of insurers on their sustainability commitments, insisting on concrete data rather than broad assurances to evidence ESG impact. The more trustees focus on these factors and ask questions, insurers will have to think about their responses and how they can evidence them driving change within the market. Make sure your voice is heard at this critical part of the process, protecting member outcomes and long- term futures.”