Many of the schemes surveyed have work to do to meet TPR expectations around governance, the report found.
This reinforces messages from the regulator in its consultation on the future of trusteeship and governance launched earlier this month.
XPS’s survey also revealed that just 54% of schemes were engaging with integrated risk management (IRM) and 79% of schemes had identified issues with their member data.
TPR set its expectations for governance and risk management through its 21st Century Trusteeship Campaign in 2017/18, but XPS’s governance survey identified “a lack of engagement and quality of governance amongst UK pension schemes”.
This was particularly visible within smaller schemes where costs and resources tend to be more stretched.
XPS carried out their survey of over 100 defined benefit (DB) pension schemes to understand how well schemes are engaging with TPR’s expectations.
Key findings from the survey included:
• 22% of pension schemes have a defined plan of action if their funding level falls
• 34% of respondents say that scheme decisions are usually made quickly
• 22% of pension schemes did not agree that they ‘manage conflicts well’
• 70% of schemes have plans to improve member data but only 42% are monitoring progress
• 94% of schemes think their governance is at least as good as the average scheme.
Rob Wallace, Principal at XPS Pensions Group said: “Good risk management and governance is fundamental to a successful pension scheme and is key to achieving good outcomes for their members.
“The quality of governance varied dramatically between schemes implying the vast majority have room for improvement, especially around IRM which was one of the lowest scoring areas of the survey.
“Although IRM has been around for several years, trustees need to embrace it, as it is now a fundamental part of the scheme funding framework and is a valuable tool to get schemes from where they are now to where they want to be.
“This is particularly true of smaller schemes, but XPS believes that IRM can be applied pragmatically and still add significant value even where budgets and resources might be limited.”
He added: “Governance remains a hot topic for TPR, with its recent consultation looking to drive up standards of trusteeship and governance.
“Our survey backs up TPR’s view that there is more to do in this area.
“Only 34% of respondents said that scheme decisions are usually made quickly and 20% referred to regularly running out of time at meetings.
“The meeting and decision-making process within schemes needs to run effectively to give the best chance of good outcomes for members.
“Our survey results show that there is a lot of good work going on within trustee boards, but it did highlight there is a lot more to be done.
“We firmly believe that good governance is key to having a well-run pension scheme and that a robust governance framework does not have to be overly onerous.
“The main thing for schemes to ensure is that sufficient time is spent managing important strategic issues.”