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The Actuary The magazine of the Institute & Faculty of Actuaries

PLSA publishes new diversity and inclusivity guide

The Pensions and Lifetime Savings Association (PLSA) has today published a guide to help trustees improve diversity and inclusion (D&I) at their pension schemes.

D&I guidance published ©Shutterstock
D&I guidance published ©Shutterstock

The ‘Diversity & Inclusion Made Simple’ guide includes an explanation of what D&I means, a summary of the benefits, and practical steps to promote greater inclusivity.

It is aimed at trustees of occupational pension schemes, but is also particularly useful for sponsoring employers, trustees of contract-based schemes, advisors and consultants.

This comes after a study by McKinsey & Company found that gender and ethnic diversity correlates clearly with profitability, but that women and minorities remain underrepresented.

Meanwhile, the McGregor-Smith review found that UK GDP could increase by up to 1.3% per year if workers from minority backgrounds progressed like their white colleagues.

PLSA policy lead for investment and stewardship, Caroline Escott, said that the guide, published in partnership with Travers Smith, is aimed to help pensions reflect diverse savers’ needs.

“There is a growing body of evidence to show that diverse boards make better decisions, avoiding behavioural biases such as groupthink. Yet PLSA research shows that 83% of boards are male.

“We’re pleased to have worked with Travers Smith to publish what we believe is the first practical, step-by-step guidance specifically aimed at building more diverse trustee boards.

“We hope this will create the diverse trustee boards which are needed to respond to and reflect diverse savers’ needs.”

McKinsey & Company found that companies in the top quartile for gender diversity on executive teams are 21% more likely to achieve above-average profitability than companies in the fourth quartile.

For ethnic and cultural diversity, it found that firms in the top quartile were 33% more likely to experience above-average profitability than companies in the fourth quartile.

Travers Smith partner Daniel Gerring said: “The benefits of diversity and inclusion in decision-making are now well established, so there is much for trustees and the rest of the pensions industry to gain from taking on board these simple concepts and measures.”

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