UK - Small to medium sized companies with DB schemes are more at risk of bankruptcy than larger companies it was claimed at JPMorgan Fleming's DC seminar.
The seminar on Monday followed on from the publication of JPMorgan’s DC Industry survey which revealed that 69% of companies that only run a DB scheme have not intention to change to DC in the next five years.
JP Morgan Fleming relationship manager, Julian Lyne, said: “While it looks good for firms to have DB schemes, a lot of these are held by the largest companies in the UK that can afford to maintain DB. New start ups shouldn’t even consider a DB scheme.”
Kim Gubler Consulting senior partner, Kim Gubler, added that: “A lot of employers are struggling, they can’t keep pace of their final salary schemes and their core business. A DC scheme can cut the cost to a more realistic and stable level for smaller businesses.”
The DC Industry Survey revealed that of companies making the switch to DC, 79% said the major motivation was cost control, while 14% said the move was made for risk control.
By Simon Meek
The government is in talks with the UK and Irish pensions regulators over how to protect members of cross-border schemes in the event of a no-deal Brexit.
The equalisation of guaranteed minimum pensions (GMPs) is at least two years away from being completed, and could take longer than four years for some schemes, a poll has found.
The Pensions Regulator will consider if schemes should be required to have professional trustees and assess the case for greater regulation of administrators and system providers, PP can reveal.
UK inflation fell from 2.3% to 2.1% in December, approaching its lowest rate for two years, according to the Office for National Statistics (ONS).