U.K. pension plan trustees spend "less than 24 hours per year discussing investment issues," according to a study by Watson Wyatt Worldwide. Kevin Carter, European head of investment consulting at Watson Wyatt, said in a news release that the findings were "alarming but not surprising."
"The majority of this time is at least now focused on more important issues such as asset allocation and less on manager selection and monitoring," he said. "This is a shift in the right direction."
A quarter of the trustees have less than five years of financial experience and less than three years in trustee matters, according to the study, which surveyed more than 400 trustees at 131 defined benefit, defined contribution and hybrid pension plans with assets totaling £137 billion ($238 billion). Trustees average about 17 years of financial experience and nine years of experience with trustee-related decisions.
The Pensions Regulator, a U.K. government agency, has also conducted similar studies and as a result is "drawing up a code of practice" to be published later this year, spokeswoman Amy Balchin said in an interview. In addition, the agency will be offering educational programs for trustees in January. "We're aware of this issue because our own research reveals that skill gap."
These efforts are partly spurred by the Pensions Act 2004, which places more responsibilities on trustees to understand investment management, accounting rules, legal ramifications and other aspects of running a pension plan.