A survey by professional trustees Independent Governance Group found 93% of advisory firms expect continued growth in schemes choosing sole trustees in the next 12 months.  

Among the firms who expect to see more growth in sole trustee appointments, one in three (31%) anticipate a ‘significant increase’ in demand next year, while the other 69% expect a ‘slight increase’. IGG surveyed 14 consultancies who advise UK corporate pension schemes.  

“Our findings make it clear that we’ve not yet reached the point of ‘peak PCST’ as the pensions landscape continues to evolve,” said Annabelle Hardiman, head of professional corporate sole trusteeship at IGG.   

On the contrary, she said the rising number of sole trustee appointments has had the effect of growing awareness of this option.  

“With more schemes striving to reach a positive endgame outcome, we expect to see the PCST population growing again next year in response to demand,” she added.  

However, Hardiman cautioned that sole trusteeship is not a “silver bullet solution for every need”.  

The sole trusteeship model introduces risks – lack of diversity, members having less of a voice and conflicts of interests – which have prompted the Pensions Regulator to say it will look at the area of sole trusteeship more closely.  There are no separate rules for sole trustees, even though TPR states that “if you act as a sole trustee on a scheme this can pose risks to members in some circumstances". The Association of Member Nominated Trustees has voiced concern about sole trustees as well.  

TPR has said it will put in place a trustee register that will allow it to track trustees across schemes, to give it a better understanding of the governance standards followed under these individuals, and that sole trustees should expect greater scrutiny. 

Despite these issues, sole trusteeship continues to gather pace as a growing number of sponsors favours the model. An earlier survey by consultancy Hymans Robertson found by March, sole trustees made up a third of professional trustee appointments.  

Respondents to the IGG survey cited a need for more expertise in endgame planning as a driver for schemes choosing sole trustees. Advisers also put high demand for sole trustees down to new regulations, including the Pensions Regulator’s effective systems of governance requirements, as well as difficulties in finding member and employer-nominated trustees, arguing there is a shortage of people who are sufficiently skilled, experienced and willing to join a trustee board. That experience is, however, not universal. The pension fund of high street bank Santander recently had 46 applications for two member-nominated trustee director roles, for example.  

Scheme sponsors who have moved to sole trusteeship said they wanted more efficient and effective decision-making, with more complex projects and an increasing regulatory and compliance burden coming second and third, respectively. Other reasons included a desire to reduce sponsor management time and cost efficiencies. A perceived lack of member or employer trustees is relatively low down on the list.