View more on these topics

Many DB schemes are ‘just treading water’

Pensions-savings-retirement-piggy bank

The Pension Protection Fund says little progress has been made in closing a total £222bn deficit on UK defined benefit schemes, with many schemes “just treading water”.

In its latest data on the trends in DB pension schemes, the PPF says the deficit across 5,794 schemes feel slightly from £244.2bn at the end of March 2015 to £221.7bn a year later.

Asset allocation has changed to reflect schemes wanting to derisk, with allocation to bonds rising to over 50 per cent for the first time. Equity investments have fallen from 33 per cent to 30 per cent in the year to March.

PPF chief financial officer Andrew McKinnon says: “2016 has been an interesting year for DB pensions. While scheme funding remained largely stable in the year to March, there have been large swings in funding since June.

“When we look back at what progress schemes have made over the last decade it appears many schemes are just treading water. The average recovery plan length, at around eight years, has barely improved, which brings home the challenge we now face.”

Recommended

5

Advisers are up against a DB transfer dilemma

Ask any adviser about whether they deal with insistent clients, and more often than not you get a categorical “no”. Bodies such as the Personal Finance Society have made their stance clear, in that the future risk of liability is just too great. The debate is loaded, but the picture is a more nuanced one […]

10

Fever pitch: The real story on DB transfers and insistent clients

Demand for pension transfers has reached fever pitch amid growing concerns about how advisers are approaching pension transfer business and how clients are being charged. The insistent client debate has focused attention on a lack of appetite to carry out pension transfers from defined benefit to defined contribution schemes. But on the advice frontline specialist pension […]

The Natixis Solution: H2O MultiReturns Fund

A product designed to bring some unique attributes to the crowded absolute return global macro space With diversification and risk management top of investors’ wish lists when it comes to alternatives, step forward the H2O MultiReturns Fund. H2O Asset Management is an independent boutique backed by Natixis Global Asset Management and has a 14-year track […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. I wonder how many deferred members of DB schemes are aware that their scheme may be “treading water” and that their expectation of receiving their promised pension from the scheme may not materialize?

    How many of the near 6000 DB schemes will be taken over by the PPF in the next 10 years?

    Will the PPF benefits have to be further reduced?

    What changes to legislation will have to be made in the future to reduce the burden on employers of inflation indexation to scheme benefits both before and in retirement?

    I suspect that the pension “promise” that is currently being made to deferred members of DB schemes will be significantly different in 10 years time.

Leave a comment