Resourcing the Pensions Department

13 Dec 2021

How do you know if you are resourced effectively?

Our client asked us to conduct a benchmarking exercise investigating in-house company pension teams. During a series of interviews, 10 companies shared their current resourcing structures, activities, challenges and drivers.

We gained valuable insights covering schemes with a membership range of 15,000 to 130,000 and scheme assets from £1.5bn to £10bn (with other clients, the schemes approached have been smaller as they have to be relevant to the client's scheme size). We openly and confidentially discussed how their pension teams are resourced, what drives their decisions and the challenges they face in a continually changing environment.

Same challenges, different answers

Pensions departments face a number of challenges and influencers. Some are common and familiar: complexity of benefit design and investment strategy, and pensions within a total reward strategy.

It is those that are less familiar and only now growing in prominence that challenge accepted roles and structures. For example, the level of member engagement, Trustee and corporate approaches to governance, de-risking journey plans, data issues, liability management exercises, auto-enrolment and the increasing importance of a strong communications strategy.

We also noted significant changes in the demands on pensions departments and the skill sets required to meet them. The pensions team is increasingly expected to be involved in strategic and journey planning.

No two pensions departments are alike and each is rising to these challenges in their own way.

New skills

There is an increasing need for specialist skills within the team. Financial controls and investment expertise are becoming highly valued skills. Relationship management is fast becoming a ‘must-have', including contract management and facilitation skills as well as the ability to balance the demands of a number of stakeholders.

Working in such a rapidly changing environment is arguably having the most noticeable impact on the role played by the Pensions Manager and the skills required to fulfil that role effectively. It is commonly asserted that the role of the Pensions Manager is evolving, but the big question is ‘Will the role exist in ten years, and if the answer is yes, what will it look like?'!

Everybody knows that one size does not fit all...

It goes without saying that there is no universally applicable solution or magic formula, but neither is there a widely-accepted starting point. It is crucial that companies develop the solution that best fits their circumstances and culture and make sure it is adaptable to changes.

Given likely resource and headcount constraints, the changing requirements and the increasing conflicts, a number of companies are reviewing their resourcing against the challenges they face, the demands on their team and the priorities of all stakeholders.

Key learnings

  • Evolution of the Pensions Manager role is driven by an increasing demand for new skills to confront the challenges now facing sponsoring employers and Trustee Boards of pension schemes.
  • In facing these challenges, Pensions departments are finding different answers.
  • There is no easily identifiable key driver of change or solution. It is important to consider resourcing within the full context.
  • It is crucial to find the solution that fits your circumstances best. Priorities should be determined with input from key stakeholders.