LONDON – 20 June 2024 – Growth in the number of Professional Trustee (PT) appointments has surged in the last 12 months, with many firms recruiting heavily to keep up with current demand and anticipated growth in the coming years.
WTW’s 2024 Professional Trustee Survey, which surveyed 15 of the largest PT firms, covering nearly 2,500 Professional Trustee appointments, shows that appointments grew by 11% in the past year. Growth for Corporate Sole Trustee appointments was even higher at 14%.
Defined benefit (DB) pension schemes are at a tipping point in the UK where a half now have a Professional Trustee. In addition, almost half of all Professional Trustee appointments are now Corporate Sole Trustees (48%), where one firm of Professional Trustees take full responsibility for a pension scheme’s Trustee Board. The remainder of Professional Trustee appointments are for Trustee Chairs (27%) and Co-Trustees (25%).
Scheme size is often a big factor in the type of Professional Trustee that is appointed. The Corporate Sole Trustee model is growing especially among the smaller schemes (less than £25m in assets) where it dominates, with around three-quarters (73%) of all Professional Trustee appointments.
“The growth in Professional Trustee appointments across all areas has continued at an impressive rate underscoring a pivotal shift in pension scheme governance.”
Richard Campbell | Professional Trustee Group, WTW
Richard Campbell, senior director in WTW's Professional Trustee Group said: "The growth in Professional Trustee appointments across all areas has continued at an impressive rate underscoring a pivotal shift in pension scheme governance. This trend reflects the increased trust and reliability that employers place in professional governance to help navigate the complex pensions landscape and address governance challenges in an efficient way."
In order to keep up with current demand for services, and to make sure they have the capacity needed to meet further anticipated growth in the coming years, PT firms have been recruiting heavily from within the pensions industry and beyond. WTW’s study shows there are more than 380 Professional Trustees operating in the UK market, a 15% increase in the past year, although this varies significantly between firms.
Due to the high growth in appointments and recruitment, PT firms are selecting talent from a wider variety of backgrounds and experiences than has traditionally been the case for pension scheme trustees. Actuaries and pension consultants are still the most popular backgrounds to recruit from (29%), but those with HR (21%), Finance (13%) Legal (13%), Investment (13%) and Covenant (3%) backgrounds are increasingly sought after.
Growth in the Professional Trustee industry is also helping to enhance diversity of gender, ethnicity and age within the Trustee workforce. This is in line with the Regulator’s ambition for Trustees to reflect the profile of the general population more closely.
Currently 42% of Professional Trustees are female, compared to 28% of the overall Trustee population. The ethnic make-up of Professional Trustees is 91% white, compared with 96% of Trustees overall, and is closer to the overall UK population. The median age of professional Trustees is 51, compared with 61 for Trustees overall and 41 for the general population.
Campbell said: “Professional Trustees bring a wealth of expertise to pension scheme governance. With backgrounds spanning a number of relevant disciplines, there has never been such a range of expertise on offer. When thinking about selecting a Professional Trustee, employers and trustee boards should carefully consider what they are looking for in terms of experience, expertise and working style.
"Looking ahead, we anticipate continued growth in the Professional Trustee market. This is further supported by endorsements from the DWP and The Pensions Regulator (including TPR’s May 2024 Corporate Plan) highlighting the important role Professional Trustees play in upholding high standards of governance, which is more crucial than ever in today's regulatory environment."
WTW’s 2024 Professional Trustee Survey, surveyed 15 of the largest PT firms in the first half of 2024. The comprehensive study covers nearly 2,500 Professional Trustee appointments and approximately 95% of the Professional Trustee industry.
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