Final salary pension scheme trustees border on complacency

Trustees of final salary pension schemes are bordering on complacency, despite a high degree of uncertainty surrounding the future financial position of some of the UK’s largest pension schemes, research has found.

A survey of 37 trustees representing more than 602,000 scheme members, by professional services firm Deloitte, entitled ‘The End Game’, found two-thirds of trustees were not considering an approach to the final settlement of their scheme’s liabilities, but should.

Almost the same percentage said they did not expect to use any other method to settle pension scheme liabilities other than the usual pension benefit payments.

“There is a widespread belief among trustees that schemes will continue to run for the long term and that pensions will be paid out over time,” said Paul Geeson, Deloitte partner, who led the research. “Companies will need to consider and drive forward end game strategies if they wish to control risks most efficiently.”

The greatest risks to pension schemes were identified as investment performance, inflation, changing mortality rates and the ability of employers to meet their obligations.

The research also found only 28% believed any form of buyout might take place in the future for their scheme.

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