In the Pensions Regulator’s Occupational Pension Schemes (OPS) Regulatory Survey , nearly two-thirds (62%) of small pension plans (schemes) said that trustees were not provided with training, compared with just 3% of large schemes – though only half of large schemes had at least one trustee that had attended an investment training course in the past three years. Nearly a quarter (23%) of medium-size schemes said trustees were not provided training.
Perhaps as a result, the research found demand among all types of occupational schemes for the new e-learning program being offered by the Pensions Regulator, roughly equivalent to the Pension Benefit Guaranty Corporation (PBGC) in the US. Some 68% of survey respondents said plan trustees would be likely to use free and user-friendly interactive learning materials provided by the regulator.
In 2004, the survey found that the most common pension offered to new employees of the main employer of the schemes surveyed was an occupational defined contribution (DC) scheme. As has been indicated recently in the US, the survey showed a slight increase in the numbers of schemes offering lifestyle investment options and ethical investment funds, with nearly half of the DC schemes surveyed giving members the opportunity to choose a lifestyle option.
For over one-half (58%) of schemes surveyed with defined benefit elements, their most recent MFR funding valuation was at least 100%. However, the survey found that 22% of schemes with elements of DB had an MFR funding valuation that was under 90%, with medium-size DB schemes most likely to be in the latter category. Looking forward, almost half of the 424 respondents felt that the scheme funding position had improved in the past year, and only 15% felt that it had deteriorated.
Among schemes with elements of DB, survey respondents said the biggest risks to continuing to provide retirement benefits were the costs of providing a scheme and benefits, followed by the performance of the scheme’s investments, and the financial markets. Many people also considered regulations and administration to be a risk, as well as longevity and annuity rates.
For defined contribution schemes, respondents cited lack of confidence, member understanding, and inadequate contributions as key risks to providing members with adequate retirement benefits.
About one-third (32%) of the schemes surveyed said that their plan is currently being reviewed by the employer or scheme trustees (or both) – and that the most likely outcomes in terms of changes were changes to benefits provided for existing members, followed by winding up the scheme, closing the scheme to new members, and changing the benefits offered to new members.
The survey represented the perspectives of 424 eligible responses from a random sample of 444 schemes (96% response rate).