Partner Article

Employers take responsibility for pension scheme management

Employers are increasingly taking responsibility for the management of their pension schemes, according to new research.

A study by MetLife Insurance indicates that 61% of companies with a turnover of more than £1 million accept primary responsibility in partnership with trustees or sole responsibility for de-risking compared with 46% of those asked in 2010.

Of those accepting responsibility, 40% say that de-risking is the employer’s primary responsibility in conjunction with trustees, with a further 21% saying it was their sole responsibility.

Wayne Daniel, Chief Executive Officer at MetLife Assurance said: “Employers increasing engagement with pension schemes and acceptance of responsibility is welcome and signifies more collegiate working relationships with sponsors and trustees”.

The research also shows that the pensions industry continues to raise awareness of buy-ins, asset allocation and buyouts as de-risking strategies. Around 37% of employers surveyed were aware of buy-ins while 33% were aware of asset allocation and 28% were aware of buyouts.

However perhaps more worrying were the 42% who were unaware of any de-risking strategies when presented with a list of solutions.

Trustees showed high levels of awareness of de-risking with 66% of those surveyed having a plan in place to de-risk in the next five years compared with 60% surveyed in 2010.

Wayne Daniel continued: “The industry can take some comfort from the levels of awareness of buy-ins and buyouts but clearly more needs to be done to help employers understand the de-risking options open to them.

“It is expected that the closer working relationship between employers and trustees will be beneficial when exploring solutions and achieving the best outcomes for schemes and their members”.

This was posted in Bdaily's Members' News section by Ruth Mitchell .