Trustee pay has increased over the past year, but chairs of trustees saw a small decrease in reward, a new survey has found. Meanwhile cyber risk has moved up the priority list.

Management consultancy Winmark has released its annual remuneration survey of pension fund chairs and trustees. The survey shows that although the key issues over the past few years remain important, there is also an increase of focus on regulatory demands as well as further consideration for climate-related financial disclosure requirements.

A finding that should be highlighted is that one in 6 respondents agree that there is insufficient time available to meet the demands of the pension chair role. There has been a steady increase in agreement since 2019, though only one in 20 respondents agreed with that statement.

This is more than likely a result of regulatory pressures, ESG becoming more of a priority (75% saw it as a priority versus 59% in the previous year) and Covid-19.

“I think it’ll be really interesting to see next year if we do get a rebound in remuneration, whether that section persists. Whether it's linked to remuneration or it’s a separate issue, driven by the external impact on the challenges and pressures that are associated with trusteeship at the moment,” said John Madden, research director at Winmark.

For chair remuneration, there was a decrease from £47,305 the previous year to £47,000. However, respondents were more optimistic than in the previous two years, suggesting some cautious hope that the start of a post-Covid remuneration rebound will be beginning.

In contrast, there is a steady increase in trustee remuneration, up from £22,417 in the previous year to £25,724. The survey found that although almost three-quarters believed trusteeship presents attractive development opportunities, a third agreed that there are not enough new trustees. This feeds into the recruitment challenges around diversity and is a figure that has hardly changed in recent years.

Despite more than three-quarters of respondents agreeing that trusteeship is not diverse enough in terms of age, gender, and ethnicity, only a third said they have made active steps to increase diversity in the past year.

Another figure to highlight is that women make up just under a quarter of trustee boards and people from ethnic minority backgrounds make up only 3%.

Lack of candidates is seen as the biggest barrier (33%), but Sonia Kataora, partner at consulting firm Barnett Waddingham, said that there are some “deeper issues to address”. She raised that some of these barriers are also about breaking down unconscious biases, “thinking about the power of stereotypes and changing the perception of pensions”.

Finally, the feedback from this year and last was that there should be a focus on not just demographic criteria, but also diversity of experience, skills, background, and perspectives.

“Research is showing that diverse and inclusive teams consistently out perform others when they include people from various different backgrounds,” said Kataora. “For example, various expertise when they include colleagues with varying years of experience...Challenging the status quo on a trustee board; or different ethnicities, so bringing different perspectives together.”

One of the biggest changes seen in the survey is how Covid-19 has impacted the industry. Mitigating cyber risks moved up the priorities this year with 66% viewing it as a priority.

Two-thirds said that the pandemic has increased cyber risks to the schemes. With government figures suggesting a 92% increase in incidents of cybercrime since the outbreak of Covid-19, there is a valid concern that pension schemes are particularly vulnerable.

Unsurprisingly, the biggest impact the pandemic had was on technology. Almost 90% of respondents in the Winmark survey saw an acceleration of technology adoption by schemes and there was an expectation for virtual meetings to continue.

Last year, respondents indicated that they weren't expecting the pandemic to have a significant impact on the finances of schemes and their financial targets. The past 12 months haven’t changed this view. Less than a quarter said they think the impact will cause a change in long-term targets for their schemes. Even fewer (11%) said the pandemic would cause long-term damage on scheme funding.

This shows a positive view of schemes’ finances, and that schemes are bouncing back from the initial impact of the pandemic. Madden said that the “longer term prospects are one for recovery rather than any sustained negative impact of the pandemic on schemes”.