Employers and trustees at odds over pension longevity
Research by Aon Consulting has found that 80% of pension scheme trustees expect their defined benefit schemes to still exist in 10 years. The research is at odds with Aon’s 2007 employer survey, which found that 50% of employers expected defined benefit schemes to be wound up in 10 years.
Aon surveyed over 250 trustees of defined benefit schemes. A minority (20%) thought that their scheme would be wound up within 10 years and over half (52%) thought that their schemes would still exist in 20 years. These conflicting expectations suggest that trustees and schemes sponsors are not communicating with each other fully.
Aon’s research said: “This lack of commonality could lead to problems over how issues affecting pension schemes are addressed, and cause greater conflict.”
Commenting on the survey results, Paul McGlone, principal and senior actuary at Aon Consulting, said: “It is worrying that there is such a large expectation gap between trustees and employers over the longevity of pension schemes. It is fundamental for trustees and sponsoring employees to have a shared view, as it impacts on how all of the big issues affecting pension schemes are addressed. Without a commonly shared view, there is unlikely to be agreement over actions and there is a danger that one party takes decisions that are a hindrance to the other. We recommend that both parties should always take steps to agree shared expectations about the pension fund lifespan.”
