Can trustees take action on equality, diversity and inclusion (EDI) even if it does not top their agenda? mallowstreet's latest research with Cardano suggests they can — and many already are. Across scheme types, we found that while EDI often takes a back seat to funding or regulatory priorities, firms that see the value are taking meaningful steps anyway. The data reveals sharp contrasts in barriers, attitudes and actions — especially between DB schemes, LGPS and professional trustee firms.

 

 

Half of defined benefit (DB) schemes say EDI is a low priority compared with other agenda items (e.g., improving funding or endgame planning). Surprisingly, 64% of professional trustee firms agree. However, trustee firms are taking EDI action despite this, and 91% say it broadens the skill set of their team.

 

Similarly, even though two-thirds of local government (LGPS) schemes worry about virtue signalling when undertaking EDI initiatives, four in every five see the benefits for the skill set of their team.

 

In contrast, DB schemes are not taking action. This may reflect the focus on endgames and wind-up, with limited time and no new members entering the scheme that would provide a broader talent pool. If the scheme’s member population has been homogenous, this would further add to the problem. 

 

 

 

DB and LGPS schemes remain male-dominated: over 40% of corporate DB schemes have trustee boards comprised almost exclusively of men, and this proportion is even higher for LGPS. These schemes report numerous challenges in increasing diversity.

 

Many corporate DB schemes are small both in assets and number of trustees. With DB endgames approaching, they will not experience enough ‘churn’ to appoint more diverse trustees. If the scheme is closed, by definition it has an ageing pool for member nominations or elections. Some industries are not very diverse to begin with, and employers also tend to nominate trustees from a senior and less diverse pool. 

 

In the LGPS, pension board members are often self-nominated councillors with a political career subject to established hierarchy. But curiously, LGPS schemes are more diverse than DB schemes. Their pensions board members are less likely to have attended university and more likely to be primary carers, come from minorities, or identify as LGBTQ+.

 

Despite some being more diverse than others already, fewer than half of DB and LGPS schemes have reviewed TPR’s EDI guidance or plan to do so in the next 12 months. A similar proportion have made or plan an update to their member communications to make them more accessible and inclusive. But only a third are reviewing knowledge or skills gaps or undertaking any EDI training – although LGPS schemes lead in the adoption of zero-tolerance anti-harassment and bullying policies.

 

 

 

 

Professional trustee firms are also gathering diverse talent. They have the highest representation of women in the UK pensions industry. In fact, at over half of trustee firms, women are either equally represented or outnumber men. Additionally, nearly three-quarters of trustee firms employ at least two pensions professionals aged 31-45 years old in every team of five. But compared to the rest of the industry, professional trustee firms have the highest representation from people with primary care responsibilities or disabilities – a clear testament to their inclusivity efforts.

Much like DC schemes, professional trustee firms have been early and enthusiastic adopters of EDI strategies. In fact, 82% of them now have one in place. This goes hand in hand with the steps taken by trustee firms to implement their EDI strategy – and the laser focus of 70% of them to continue EDI training (see bottom right). Additionally, 60% conduct an annual performance assessment against their strategy. These proportions are much higher than amongst DB, LGPS, DC and hybrid schemes.

Surprisingly, only 18% of trustee firms have set EDI targets. There can be good reasons: some firms are already diverse enough; others say targets further restrict an already small talent pool; and for many, it is not in their power to dictate EDI targets for the schemes they serve. At any rate, this suggests a greater focus on inclusivity at work rather than increasing representation. 

 

 

So while action on EDI is happening — especially among professional trustees — formal target-setting remains rare. In our next article, we will explore why that is, what makes a good EDI target, and how the industry is shifting its focus to more practical levers like inclusive recruitment and cultural change. Until then, download our full EDI Report 2024 here. 

 

Or alternatively, continue reading here: