Chairs of UK pension scheme trustee boards were paid on average £47,305 (€51,475) in 2019, the first year since 2015 that did not see a salary increase in real terms, according to a survey.
Last year the average remuneration for a chair was £47,004. Between 2015 and 2018 a pension scheme chair’s remuneration increased at around 3.3% per year adjusted for inflation. For both 2018 and 2019 there is very little difference between the median and the average.
Carried out by Winmark in partnership with Barnett Waddingham, the new survey drew the highest response rate in its history, with 120 chairs and trustees contributing, representing funds with a combined value of more than £325bn. The survey was instigated in 2011.
In 2019, chairs’ salaries ranged from £7,000 to £120,00. By days worked per month, average remuneration was £34,464 for chairs working one or two days, £45,423 for three to four days, and £55,680 for chairs working five days or more.
In the UK, not all pension scheme chairs are paid; 83% of the schemes participating in the Winmark-Barnett Waddingham survey paid their chairs a salary, a similar proportion as in 2018.
By professional background, the highest average salaries were earned by those from pensions consultancy and actuarial backgrounds.
Female chairs paid more
Female chairs continued to receive a higher average remuneration than male chairpersons, which the report authors suggested was likely a function of the types of role they occupied, with a higher proportion of female chairs for example being professional trustees.
Among a wealth of other data points, the survey also captured expectations for an increase in pay. Most chairperson respondents (61%) indicated they expected remuneration to remain the same, although a third expect an increase and 7% a decrease.
The survey revealed an increase in sentiment that trustee chairs were underpaid – just over a third (34%) said that pay levels were too low to attract sufficiently skilled chairs and trustees, up from 24% last year.
A bit more than a third again each said that remuneration did not adequately reflect the complexity of their role (39%), and did not adequately reflect the pressures of their role (36%).
Although most chairs reported they had enough time to meet their responsibilities, the proportion that felt they did not have time to adequately meet the demands placed upon them increased to 10% from 5% in last year’s survey.
Among trustees that are paid, the average remuneration was £22,417 in 2019, up from £20,348 in 2018.
This is across different types of trustee, with professional trustees being paid more on average than employer-nominated and member-nominated trustees.
Presenting the main findings of the survey during a webinar, John Madden, research director at Winmark, noted that 69% of respondents indicated feeling that an increase in the number of professional trustees on boards had a positive impact on governance standards and member outcomes.
Law firm Squire Patton Boggs has said it is likely that the trend for appointing professional/independent trustees will continue, particularly as accreditation for professional trustees becomes a reality and evidences continued increase of standards.
Diversity challenges
Increased diversity on trustee boards remains elusive, according to the survey report. Almost 80% of respondents indicated trusteeship was not diverse enough, in particular in terms of age and gender.
At the same time, only 40% of respondents agreed that their schemes had taken steps to increase diversity, which the survey report authors said indicated that some schemes had not been able to prioritise or address the issue.
“The issue is not around selection processes or any lack of will or motivation to achieve diversity in trusteeship [but] in terms of attraction – availability of candidates”
John Madden, research director at Winmark
Winmark’s Madden said there was “a very clear message that the issue is not around selection processes or any lack of will or motivation to achieve diversity in trusteeship [but] in terms of attraction – availability of candidates”.
Almost half of respondents (47%) said the pool of candidates to recruit from was too small, and where candidates were available 20% said they were not interested in trusteeship and 11% said they lacked the necessary skills for the role.
“One of the messages coming out of this is that if there is a will to increase diversity in trusteeship many of the issues may be somewhat upstream of the pension schemes themselves, and that encouraging a broader interest, engagement and involvement with the sector as a whole from an early stage will be key in terms of addressing this issue,” said Madden.
The survey report can be found here.
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