Pension chairs: Rising rewards and evolving roles
The report surveyed 129 Chairs and trustees of UK pension schemes, representing funds with a combined value exceeding £325 billion, making it one of the largest and most comprehensive studies of its kind.
This article highlights some of the key themes and statistics from the report, which offers a unique lens on how remuneration, governance and trustee responsibilities are shifting in response to regulatory change, market pressures, and the professionalisation of the sector.
The median remuneration for Chairs of pension schemes who responded to the survey increased by 14% to £57,000 in 2024, up from £50,000 last year. This likely reflects both inflationary pressures and the growing professionalisation of the role, and an increase to real terms remuneration was in line with the expectation of nearly half of last year's survey respondents.
However, when adjusting for inflation, backdating the median remuneration in 2024 of £57,000 shows that in real terms, remuneration is actually lower than the median reported over 2018-2020 inclusive.
In this year's survey, once more, nearly half of respondents expect further increases in 2025, with inflation and increased time commitment cited as the main drivers.
The range of remuneration reported is surprisingly broad, from £5,000 up to £195,000, and the report gives further insight into the breakdown by sector, demographic and experience. Specifically:
Looking at remuneration for the rest of the board, 76% of schemes that responded compensate their non-Chair main board trustees, with median remuneration at £22,500 (noting that those who chair subcommittees receive additional fees.) This median figure is not consistent across trustee designation: professional trustees (including those from a firm and otherwise) command the highest median fees (£50,000 and £44,750 respectively). In contrast, employer-nominated and member-nominated trustees typically receive lower median remuneration, ranging from £10,000 to £25,000 per year.
Only 30% of respondents now feel that remuneration does not adequately reflect the pressures and complexity of the role, down from 40% last year. This marks a positive shift in perceptions, with more Chairs and Trustees feeling that their contributions are being recognised.
There is a growing recognition that competitive remuneration is essential to attract and retain skilled Chairs and Trustees, and some express concern that low pay may disincentivise talented individuals from pursuing trustee roles or professional accreditations.
The survey results on Board Effectiveness are consistent with what we have seen in other WTW surveys: over 50% of schemes carry out board effectiveness reviews on an annual basis, and about two-thirds of schemes are carrying out self-assessment reviews compared to just over a quarter of schemes that use a third-party. TPR has indicated they will be increasingly interested to understand schemes' approaches to board effectiveness – not just whether regular reviews take place but also the quality of review and whether it adds value. So we can expect increasing scrutiny on this.
The range of potential components of a good effectiveness review are:
In addition to board effectiveness, the survey asked if an effectiveness review is carried out at an individual level (e.g. for a Chair) with nearly half of survey respondents confirming that it is currently not. It will be interesting to see how this response will develop over time and as remuneration levels increase.
With the changing pensions landscape, trustees have a growing responsibility to effectively manage pension schemes and nearly 35% of this year's survey respondents feel that a change in time commitment should drive an increase in remuneration levels next year.
This sentiment might be at least in part linked to new governance requirements. The key governance focus for schemes in 2025/2026 is preparation leading up to their first Own Risk Assessment (ORA). Schemes may be beginning to get on top of these requirements, reflected by the slight decrease since last year (from 53% to 50%) in respondents feeling that scheme governance was "excessively burdensome". Only 22% felt there is insufficient budget available (time/resource) to meet the demands of scheme governance; though a fifth without bandwidth will still be a concern to the Regulator.
In June, The Pensions Regulator's CEO gave a speech on "The changing nature of trusteeship" which acknowledged an increase in responsibility and time commitment for trustees and highlighted the skills and expertise professional trustees bring to the market. This is supported by nearly two-thirds of respondents to this survey (consistent with last year) concurring that increasing the number of Professional Trustees will have a positive impact on governance standards and member outcomes.
This year's survey also investigated qualifications and accreditations amongst pension chairs and trustees and only 17% of schemes did not require Chairs to have qualifications or evidence beyond their skills and experience (though by contrast there is not necessarily a strong perception that remuneration is linked to qualifications).
The increasing prevalence of professional trustees does have to be balanced with the importance of ensuring the member voice is heard. Over 90% of survey respondents noted that the member voice is represented on the Trustee Board via its Member Nominated Trustees (MNTs), and for the remaining respondents, the majority use member focus groups. We know from experience that new MNT recruitment can be challenging for some schemes, supporting the rationale that remuneration can be used as a tool to attract talent (and 58% of survey respondents agree with this, up from 53% last year).
The findings of this year's report highlight the importance of competitive remuneration, effective governance, and the need to attract and retain skilled trustees. With new regulatory requirements and reforms on the horizon, trustees and sponsors must remain agile and informed.
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Luna Fadayel, is a Scheme Actuary and relationship manager with a passion for connections. As host of WTW’s Pensions Perspectives Podcast, Luna blends actuarial know how with real world conversations to help people feel confident about their financial future.
