Power In Capable Hands Lesley Williams Chair - PLSA

Pension fund governance is too important To ignore

SCALE PRIVATE SECTOR DB PRIVATE SECTOR DC 34,000+ DC schemes £1.5tn assets 5,945 schemes Average: 1,800 members £200m c.9m members Average £10m assets 12m members PRIVATE SECTOR DC

consolidation 800 schemes in 2005 365 schemes in 2015 5,000 in the 1990s 500 in 2009 25 schemes

BIGGER SCHEMeS DO BETTER DNB: a pension fund with 10 times more assets under management has 7.67 bps lower annual investment costs State Street: the largest local government and corporate pension funds generally out-perform the market Keith Ambachtsheer: scale is critical to achieving lower costs per member for operations

TPR AGREES Large schemes generally displayed better governance than medium and small schemes... small schemes were found to be less likely to have the support of external advisers, meet TKU standards and were less prepared for the new DC governance standards and charge controls.

Three reasons why Economy of scale Buying power More available skill

A TYPICAL CORPORATE BOARD FD HR CEO Chair Marketing Operations Legal IT Commercial

AND FOR A PENSION SCHEME? Actuarial Commercial Communication Investment Pensions technical Operations Legal Corporate financial analysis

83% 90% 80% The reality gender profile of LGPS Pensions Committee gender profile of governance board 90% gender profile of investment committee 80% gender profile of LGPS Pensions Committee Gender profile of LGPS investment committee But we’ve got a long way to go. There are lots of aspects to diversity – gender, ethnicity, socio-economic, age, disability, LGBT. But let’s just look at one indicator – gender. These data are taken from our own Annual Survey – the figures are pretty staggering. We don’t know if Boards and ICs are stale or pale – but they’re pretty overwhelmingly male. Source: PLSA Annual Survey 2015

HOW CAN YOU INCREASE DIVERSITY? Look at the way you advertise Don’t elect, select Diversify your short-list Mentor women for senior roles Pre-appointment training

PLSA Diversity project What When? Investment Conference 2017: Diverse Investments, Diverse Perspectives March 2017 Leadership for Managers course Trustee network January 2017 Trustee chair dinner January/February 2017 Publication Mentoring/development programme 2017 Data gathering: analysis of PLSA members Ongoing

Individuals are typically judged on the alignment between their skills and those of the existing organisation. It takes quite a leap of faith to choose instead the candidate whose skills are misaligned with the hiring organisation

THE SNEETCHES It takes quite a leap of faith to choose the candidate whose skills are misaligned with the hiring organisation.

Power In Capable Hands Lesley Williams PLSA