For many defined benefit (“DB”) pension trustees, pension scheme governance has become a cost problem of its own.
The operational burden of running a scheme properly has grown substantially over the past decade, often without a comparable improvement in outcomes. Trustees serving maturing schemes face a particular tension: as a scheme moves closer to its endgame, governance structures built for a different phase of the funding journey can start to feel oversized.
That tension sits at the heart of what Apex Pension Trustees delivered for the John Laing Pension Fund.
The problem with "more"
The instinct in governance is often to add rather than to reconsider. More reporting. More oversight layers. More meetings. This can feel responsible, but it frequently produces the opposite of what trustees need: slower decisions, higher costs, and a sponsor left wondering whether the governance model is proportionate to the scheme's actual position.
The John Laing fund, a £1bn DB scheme at a stage of maturity where simplification was both possible and appropriate, needed a different approach. The question was not whether to maintain rigorous oversight, but how to deliver that oversight more efficiently.
What changed
Working with Apex Pension Trustees Limited, the fund redesigned its governance structure to reduce day-to-day operating costs while maintaining decision quality and trustee oversight. The focus was not on reducing governance activity indiscriminately, but on distinguishing between governance that added value and governance that had become procedural.
By consolidating oversight activities, clarifying decision-making responsibilities, and building a structure proportionate to the scheme's maturity and risk profile, the fund achieved a 50% reduction in business-as-usual (“BAU”) governance costs. That figure is significant not as an end in itself, but because of what accompanied it: improved decision-making quality and meaningfully stronger sponsor confidence.
Why this matters for employers
It is easy to focus on trustee outcomes when assessing governance quality, but sponsor confidence is a reliable indicator of whether a governance model is working as intended
Where governance is overly complex, it tends to show up in:
- higher ongoing costs
- slower execution when trustee decisions are needed
- more friction around funding and endgame discussions
In the John Laing case, simplifying the governance model made it easier for trustees to act with clear accountability and at pace. This made it easier for the sponsor to engage on the issues that actually matter, namely funding, risk, and timing.
At this stage in a scheme’s life, that has practical consequences
- the ability to move quickly when insurer pricing is attractive
- clearer alignment on endgame strategy
- less unnecessary drag on cost and management time
For sponsors, the test is simple: Does the governance model support getting to endgame efficiently, or does it slow it down.
A model worth examining
The DB market is at an inflection point. Many schemes that were in accumulation a decade ago are now maturing rapidly, with a growing number approaching buy-out or buy-in. The governance structures appropriate for a growing, open scheme are not always appropriate for one ready for its end-game.
This increasingly requires trustee models built around operational efficiency, delegated expertise, and clearer accountability. Sponsors who have not revisited their governance model in several years may find they are carrying more cost and complexity than their current position warrants.
What the John Laing experience shows is that there is a meaningful difference between governance that is thorough and governance that is merely busy. Cutting BAU costs by half while improving both decision quality and sponsor confidence is not a paradox. It is the result of asking a straightforward question: is this governance structure built for the scheme we are running today, or the one we were running five years ago?
For maturing DB schemes working through that question, Apex Pension Trustees offers a proven framework for getting the answer right.
To find out how Apex Pension Trustees can support your scheme's governance, speak with our team.
