On the go: A significant minority of pensions professionals are distrustful of both defined contribution and defined benefit consolidation, according to a poll from the Pensions Management Institute.
Only 67 per cent of 165 trustees and pension professionals think DB consolidation could succeed, with 33 per cent of respondents saying it was not a good idea. This finding mirrors recent research from Hymans Robertson, which found that only 25 per cent of trustees say moving to a commercial consolidator would improve the security of members’ benefits.
Concerns were also expressed in the PMI survey on the adequacy of regulation and management, with some respondents questioning whether commercial operators could provide consolidation propositions to smaller schemes, who would benefit the most.
Commenting on the findings, Lesley Carline, president of the PMI, said: “While our respondents felt DB consolidators will succeed and have a role to play within the UK pensions market, there is concern over governance and security, and a note that they will not help out smaller distressed DB schemes that need a solution to their woes. That said, they are not marketing themselves as saviours, but as an alternative to traditional options.”
The survey also found that an overwhelming majority (77 per cent) of participants think less than half of single DC trusts will transition into DC master trusts. The industry outlook for collective defined contribution was also pessimistic, with 67 per cent of participants stating that they do not think it will succeed, as the moment for CDC to flourish has passed.
