Management Consulting

Aon conducted a survey of 152 UK defined benefit (DB) pension schemes, revealing that 57% of these schemes have appointed a professional trustee to their board. This trend is expected to grow as employers increasingly focus on endgame planning for their pension schemes. The survey highlighted that many schemes, particularly those with less than £250 million in assets, are adopting a sole trustee model, which is seen as a cost-efficient governance solution. James Patten, a partner at Aon, noted that while a professional trustee may not be necessary for all schemes, their expertise can be particularly beneficial for those looking to settle pension risks through insured transactions. The knowledge and experience of a professional trustee can enhance credibility with insurers and facilitate quicker, more robust decision-making for schemes that opt to run-on. To assist employers and trustee boards in navigating the complexities of pension governance, Aon has developed a four-step process. This process includes articulating governance aims, reviewing the current governance structure, assessing the operational effectiveness of the trustee board, and considering the appointment of new trustees as needed. This structured approach aims to ensure that the governance framework aligns with the evolving needs of the pension schemes in a volatile economic environment.