Sponsors and trustees have differing opinions about how the Autumn Statement plans will affect their schemes and members.
Surveys conducted by XPS Pensions Group reveal that just 24 per cent of respondents think members of the DC and DB schemes would profit, 28 per cent don’t think either will, and 28 per cent are unsure.
In terms of endgame strategy, 67 per cent of respondents would rather see a buyout, while 28 per cent are thinking of continuing their defined benefit plan for surplus.
Only 3 per cent support a plan for consolidation overseen by the Pension Protection Fund. There is a split of 52 per cent in favour and 48 per cent against the planned “pot for life” scheme for DC pension holders.
XPS Pensions Group partner Wayne Segers says: “Whilst it’s not surprising that buyout remains the most popular endgame strategy for DB schemes, we are seeing more employers and trustees explore running their schemes on safely for surplus. This can have a substantial positive impact on DB members, employees’ workplace pensions and employers’ businesses.
“What we hope to see is a consultation that looks not only at appropriate funding levels and managing risk, but also how legislation and regulatory guidance can properly support trustees who are being asked to manage schemes to run on for surplus.”
XPS Pensions Group head of DC Sophia Singleton says: “The Government’s pot for life proposals will involve a radical overhaul of the relationship between employers, employees and their pensions. It’s clear from our poll that just over half of scheme sponsors and trustees believe the benefits that it would have for individuals might outweigh the cost of implementation.
“Our poll demonstrates that we need to have a full and proper debate involving all stakeholders and we welcome DWP’s call for evidence as a starting point for this conversation.”
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