Why equality, diversity and inclusion in pensions matter
Master Trust and IGC Lead.
Scottish Widows’ Master Trust has taken a fresh approach to embedding equality, diversity and inclusion across its operational framework.
Earlier this year, The Pensions Regulator (TPR) published its equality, diversity and inclusion (ED&I) guidance for pension scheme governing bodies and employers. The guidance offers a starting point for designing and implementing an ED&I strategy, focusing on key areas such as inclusive member communications and trustee board diversity.
As Louise Davey, TPR’s Director of Regulatory Policy, Analysis and Advice, articulated at the time, “harnessing diverse views can help pension scheme governing bodies weigh issues in more detail and openly consider aspects important to those impacted by their decisions.”
Indeed, plenty of workplace studies show that diverse groups of people make better decisions and, as Louise went on to say, “all savers deserve to be in a well-run pension scheme that makes decisions in their best interests.”
TPR recently sent out its first ED&I survey to pension decision makers which has been shared with almost 100,000 trustees and other pension scheme board members. The purpose is to gather views on diversity and inclusion and find out what boards are already doing to understand their members and support their diverse needs.
It’s clear that TPR expects progress and a direction of travel which is meaningful for members, and this valuable insight will undoubtedly help shape further guidance.
Our equality, diversity and inclusion framework
Equality, diversity and inclusion will mean different things to each of us, in a personal capacity as well as professionally. It can include everything from meeting the needs of members who are neurodivergent with conditions such as dyslexia or autism, women, ethnic groups, the LGBTQ+ community – and more.
The Scottish Widows Master Trust has already made significant strides in this area and successfully embedded a wide-ranging and comprehensive ED&I framework, going above and beyond the current regulatory guidance.
Being part of a purpose-driven organisation such as Lloyds Banking Group puts us in good stead as ED&I is very much built into the DNA, culture and values of our business and we benefit from the learnings shared by our well-established colleague networks and third-party partnerships.
These networks support our inclusive working environment, and we are fortunate to be able to take learnings from them as well as from TPR guidance and broader industry insight.
We want to demonstrate inclusive behaviour and integrate ED&I best practice into every aspect of the Scottish Widows Master Trust. This goes across our culture, governance, product design, support for our members, how we communicate and the overall experience and value all members receive.
Our framework has been developed around three main pillars and within each one sits objectives and an action plan:
- Inclusive governance;
- Inclusive operation and design; and
- Inclusive insight and behaviours.
The trustees’ ED&I policy underpins the framework and underlines the strategic aims, beliefs, risks, opportunities and broader principles, as well as how ED&I is incorporated into all aspects of the Scottish Widows Master Trust.
It also outlines how the trustees collectively operate as a board and the expectations they set for their providers, suppliers and advisers.
As for our members, they benefit from an established and progressive customer inclusion strategy which is further strengthened by the Consumer Duty principles which arrived at the end of July 2023.
The role of the Chair is pivotal
The recent TPR guidance reinforces the importance of the Chair in driving and promoting ED&I. It is the Chair who sets the tone for discussions, how ED&I is embedded into the culture of a governing body – and how it drives meaningful action and continues to make decisions in all members’ best interests.
All trustees, however, need to assist the Chair in this respect and collectively support progress towards meeting ED&I objectives. Trustees from the Scottish Widows Master Trust have also nominated an ED&I lead to work alongside the Chair to drive action and we’ll continue to listen to, and learn from, members to understand what we can do better.
Sharing our learnings
Until we all take action, ED&I remains a concept. We hope our approach can act as a blueprint for other governing bodies who also want to be an exemplar in ED&I, and we plan to share more detail on this over the coming months.
In setting ourselves up for success we considered three simple principles:
- Be clear on what ED&I means;
- Be specific, set goals and measure success; and
- Be intentional, purposeful and mindful.
Embedding ED&I is as much about social responsibility as it is fairness in pensions, and it is incumbent on us all to ensure savers are part of a well-run pension scheme which supports their best interests – no matter who they are.