An action plan produced in partnership with the pensions industry to improve diversity and inclusion across trustee boards has been published today (27 September 2022).
The Equality Diversity and Inclusion (ED&I) action plan comes amid worrying new figures showing trustees are not prioritising this key area.
The action plan sets out steps TPR, in partnership with the Diversity and Inclusion Industry Working Group (IWG) will take to encourage and support trustees to recruit diverse candidates and create a culture of inclusion.
It sets out how TPR will set trustees clear expectations on diversity along with providing practical tools and information on recruiting diverse candidates, creating and maintaining an inclusive culture, engaging with employers on diversity and ensuring communications to scheme savers are inclusive.
As set out in TPR’s Corporate Strategy, improving diversity and inclusion on trustee boards is essential to effective decision making so that all savers get good value for money. Yet concerning findings from new research (PDF, 392KB, 16 pages) also published by TPR today shows too few trustees are prioritising diversity.
Acquiring good data on scheme diversity is essential to bring about and measure improvement however, the survey reveals schemes are failing to collect the data they need.
Just 10% of DB schemes and 14% of DC schemes were collecting trustee diversity data but of those who were, two fifths of DB schemes and nearly half of DC schemes said that they had no plans to use the information.
Among schemes that were not recording trustee diversity data, 41% of DB schemes and 30% of DC schemes said they had not thought about collecting it and, worryingly, 35% of DB schemes and 43% of DC schemes felt there was no need to capture this information at all.
Executive Director of Regulatory Policy Analysis and Advice, David Fairs said :“Our research shows that trustees have a long way to go towards embracing the importance of diversity and inclusion. The status quo is not acceptable.
“Trustee boards that are not diverse risk knowledge gaps, entrenched ideas, biased thinking and poor decision making which puts savers at a disadvantage.
“We want to see trustee boards with a wide range of perspectives, knowledge and skills and where everyone has the opportunity to contribute and challenge from different perspectives.
“We have worked closely with the industry working group to develop this action plan. It sets out clear steps TPR together with the industry will take to help trustees bring about the change that is clearly needed.”
The survey was carried out to help inform progress on TPR’s ED&I strategy which set ambitious targets to boost diversity and inclusion across the pensions industry. The research data will be used to set a baseline so that TPR can measure its success in respect of encouraging trustees to become more diverse and inclusive.
The action plan sets out how TPR will:
- develop a mechanism for how TPR will collect and use diversity data in the longer term to measure success.
- set clear ED&I expectations in TPR’s upcoming single code of practice
- publish guidance in partnership with the IWG to help trustees understand and meet TPR’s expectations. The guidance, which will be regularly updated, will be published at the end of this year or in early 2023
- continue to work with industry stakeholders to focus on how the roles of employers, chairs, and professional trustees can be influential in diverse recruitment and developing a culture of inclusion
- engage directly with trustees through TPR supervision to identify barriers to diversity and highlight best practice
Notes to Editors
- The Diversity and Inclusion Industry Working Group was set up to share knowledge and best practice and discuss ways for TPR to support trustee boards to become more diverse and inclusive. It is made up of more than 60 representatives from across the pensions industry and began regular meetings in January 2021.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
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