The majority (57 per cent) of defined benefit (DB) pension schemes now have a professional trustee on their board, a survey from Aon has found.

Reflecting on the findings, Aon partner, James Patten, said that while a professional trustee will not be “appropriate” for all schemes, many of which already have “highly” experienced trustees on their board, the increased focus from employers on endgame planning is expected to drive continued growth in the proportion of schemes with a professional trustee.

Patten said: “Where employers are looking to settle their pension risk through an insured transaction, the additional experience of the process that a professional trustee can offer, in addition to that of a specialist adviser, is likely to be attractive.

“That knowledge may also enhance credibility with insurers as the scheme approaches the insurance market. For schemes that are instead looking to run-on, there will be new and complex decisions to make, and, in that case, a professional trustee is likely to be valuable in reaching quick and robust decisions.”

Aon suggested that many new professional trustee appointments may be made on a sole trustee basis, particularly given the background of the current economic climate and the increasing governance of schemes.

Patten also pointed out that 87 per cent of the schemes using the sole trustee model had less than £250m in assets, suggesting that cost-efficient governance is “particularly important” at that end of the market.

However, he reasoned that there may begin to be more interest for a sole trustee approach in larger schemes in the coming years.

"But it’s one thing to have a plan, and quite another to implement it. In the lead-up to moving to an endgame, we suggest employers and trustee boards work collaboratively to consider how their needs may have altered as their circumstances have changed,” he added.

“They also need to review the pros and cons of different trustee structures, how the current governance structure aligns with these requirements, and then how any changes can be made. This doesn’t always mean a professional trustee, or a sole trustee solution is the right answer.

“It often depends on the skills and diversity of the existing trustee board, the history of the scheme, and the nature of the relationship that the trustee board may have with members.”

Aon also outlined a four-step advice process for employers to work with trustees as schemes navigate new forms of volatility, which included articulating the governance aims, reviewing the governance structure against these aims, reviewing the operational effectiveness of the current trustee board and considering the appointment of new trustees where appropriate.

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