mallowstreet and Cardano started tracking the equality, diversity and inclusion (EDI) journey of the UK pensions sector in 2022. Our latest report is based on data collected in Q4 of 2024 and reveals that defined contribution (DC) schemes have now overtaken their defined benefit (DB) and hybrid peers. 

 

Early and enthusiastic adopters of EDI practices, DC schemes have not only improved gender representation in their ranks, but also built a younger talent pipeline. However, the main reason for all their efforts are member outcomes. What can the industry learn from DC schemes? 

 

 

DC schemes have now overtaken their DB and hybrid peers in EDI practices. Not only do 80% have a strategy in place, but 40% have also set EDI targets (e.g., to increase the representation of underrepresented groups, or conduct further EDI training). 

More significantly, over two-thirds of hybrid schemes and three-quarters of DC schemes also collect EDI statistics on their trustee board. While targets can have unintended effects, such as tokenism and further restricting the talent pool, tracking the diversity of their trustee board and teams have undoubtedly helped DC schemes improve their diversity.

 

 

The results of EDI policies are obvious among DC schemes. Unlike their closed DB peers, DC schemes are accumulating both assets and talent. This is evident in the growing diversity of these pension organisations over the past three years. 

 

For example, 43% of pensions professionals used to work on DC schemes with on average less than one woman on every five-person team in 2022. In contrast, nowadays 42% are on schemes that have about two women out of every five pensions professionals, and for an additional 42% the representation is even higher. All this shows that individual schemes can make a difference even if the pensions industry faces a challenge in attracting more diverse talent.

>>>Download the full report here, or keep reading below. 

 

Nowadays, 30% of DC schemes employ two pensions professionals aged 31-45 years old in every team of five, and 30% have an equal or overrepresentation from this age group. This is vital in ramping up younger talent into the pensions industry and putting pensions as a career choice firmly on the map. 

 

 

 

EDI is all about member outcomes: 60% of DC schemes struggle with collecting and storing diversity and inclusion data on members, and just under half say EDI is difficult to measure. But for 53%, the key benefit of greater EDI efforts is delivering better value to members.

 

 

 

Importantly, almost 80% of DC schemes are taking steps to make their member communications more inclusive and accessible. Indeed, DC and hybrid schemes collect more detailed data on their members – and do so more consistently. 

 

  

However, few DC schemes collect data on the religion and neurodivergence of their members – two areas potentially impacting both investment product design and member communications.