Being a rarity on pension fund boards, it would be easy for young trustees to feel they have to work harder to make their views heard. But the real challenge is getting there in the first place. For young people, getting on a trustee board is a journey so unlikely that whenever a young-ish face does show up, that person instantly becomes the new poster child for trustee organisations and is invited to speak on multiple panels. However, such intense interest in young trustees only confirms their rarity rather than symbolising change, it seems. With young trustees such a rare species, scheme should be careful not to alienate them. Lorna Russell, vice chair of the London Borough of Camden’s pension scheme, believes boards must be diverse but knows that not all of them are inclusive where a young person is at the table. “I’ve been a pensions trustee since I was 25 and have, on the whole, found the experience to be relatively inclusive," says Russell. “However, I do know that my experience has been quite a ‘lucky’ one. I’ve met other young trustees who have felt ignored (or even dismissed) at meetings and have left feeling disheartened. My advice to them is to undergo relevant training and feel confident to speak their minds; their members will be grateful.” The fact that some young trustees have left feeling disheartened should spark concern, but according to David Weeks, who co-chairs the Association of Member Nominated Trustees, it is the smaller issue. “The problem is not the treatment of the ones who get there but getting them there,” he believes. “By the fact they got there as young people it shows they have a certain presence and... ability to hold their own."
Are young people less known to members?
Weeks believes one of the key obstacles is convincing employers and scheme members to nominate young people, particularly on defined benefit schemes, most of which have closed to new entrants. “If it’s closed for 10 years the people in the scheme are not likely to know the younger ones,” he observes, adding that this problem is amplified by appointment processes based on election only, rather than a combination of trustee election and selection. Young employees tend to be concentrated in defined contribution schemes, but these have their own disadvantages when it comes to trustee recruitment, finds Weeks: “The difficulty in getting those is there are quite a lot of comparatively small pots involved. People are probably less committed than they would be with bigger value DB pots.” However, the radical shake-up the pension freedoms represented means it should be easier for younger trustees to be elected now than it was, as experience of pensions pre-2015 is not as relevant anymore. “The pension freedoms were a major change in the way things operated,” says Weeks. “Our members tend to feel that the newer ones know as much as the older ones, the order has changed. Anyone who’s been there for the last four years has as much experience as those who have been there for 34. It’s quite a game changer.”
Young trustees will be key link for dashboard, ESG and contributions
Young trustees are especially valuable for pension schemes because of their greater affinity to technology, which will be needed when the pensions dashboards are introduced, argues Weeks. Similarly, he says young people on average tend to be more supportive of applying environmental, social and governance criteria to investments, which the government and regulators are putting more weight on through the introduction of new reporting requirements from October this year. Acting as messengers, younger trustees could even play a role in encouraging scheme members, especially younger ones, to save more than the minimum into the scheme, something which many in the industry consider necessary
What, in your view, are the obstacles to getting young people on trustee boards?
Written by Sandra Wolf - Mallowstreet