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How hard is it to fill in-house pension positions? Opinions are split but anecdotal evidence suggests it very much depends on whether one looks at the top end or at entry level roles.
The UK vacancy rate per 100 jobs was 2.7 on average in July to September, according to the Office for National Statistics, but some funds appear to be considerably above that average. An October staff structure document from the Lothian Pension Fund shows the fund had nine vacancies, 12.5% of the total.
Lothian has said that some of these vacancies are growth roles while others are not progressed with at the moment.
CEO Doug Heron said the fund has hired 11 people this year across administration, investment management and HR.
"We’ve been delighted with the level of interest shown in our opportunities, with the most recent role attracting 57 candidates in less than a week," said Heron.*
Are in-house pensions managers disappearing?
Lothian might not have problems recruiting good people, but some private sector pension funds are facing a tougher environment, it seems.
Lindsay Hawkins, a director at governance specialists Muse Advisory, says private sector schemes are finding recruitment to pension roles hard for various reasons at the moment.
One is that long-serving pension managers are beginning to either consider moving into portfolio careers or retirement.
Given that pensions management has “for some time” not attracted the number of graduate entries it once did, this is leading to shortages, she says, compounded by the fact that sponsors are becoming less willing to invest in developing in-house roles for what is now often a legacy scheme.
Talent is already scarce but the skills requirements for pensions management are growing. “Pensions managers now need to be experts in governance, contract and supplier management, and sponsor relations – as well as needing the traditional technical pensions and people skills,” she says.
“Also, as pensions teams shrink, there are less in-house career development opportunities – once someone has got to the ‘top-job’ in pensions in a company, their career path options are limited,” says Hawkins.
This is pushing more employers and schemes to take on contractors or partially outsource to cover skills gaps or deal with workload. Full outsourcing is another option, and she notes that outsourced providers are better able to offer career progression to pensions managers.
No blocked pipeline at top levels
Pensions management might be experiencing tough times in terms of recruitment but there is no shortage of talent at the top end of pension funds, says Paul Battye, chief executive of recruitment company Hoffman Reed, who headhunts C-suite executive and trustees.
“There are good quality people there who want to work in a large pension fund,” he says. Working in a fund at a high level is attractive enough for potential candidates – from consulting or asset management – to swallow a pay cut for a move because of the intellectual challenge and the experience of being on the ‘doing’ side of things.
But attracting is not the same as keeping, and pension funds can sometimes struggle to retain those good people as they can’t compete on remuneration packages with asset managers and large consulting firms, which remains “a big problem”, says Battye.
The real problem area of pension recruitment
It is perhaps not surprising pensions becomes attractive at a higher level. Pensions is a field people tend to come to mid-career via a different profession, and only by accident at a young age. Few have the conscious ambition to seek employment at a pension fund after completing their education.
Jerry Gandhi, director of consulting firm Cap Services, says he landed in pensions because the job was available – and then spent several years trying to move out of the area before realising that there is a career in it.
For Gandhi, when it comes to staffing the problem child is administration. Third-party administrators have historically been a cost-sensitive service – and as cheap means lower pay, retaining good people is more of a challenge, he says.
The industry’s reputation is not helping to attract youngsters to pensions jobs, he believes, meaning that “those who are good move up fast, those who aren’t move into hygiene mode, doing enough to get by,” says Gandhi. “It’s a motivational issue.”
There is a hope that quality will improve through technology, also improving the image of the jobs, he says, “but it’s a long slog”.
*This article has been updated to more accurately reflect the recruitment situation at Lothian Pension Fund.
Do pension funds have problems filling roles? Tell us what you think!