UK - Trustees are realising the "brutal truth" that occupational money purchase schemes are not simple to run, independent firms have told IPN's sister publication, Professional Pensions.
Law Debenture director Eddie Thomas said many trustees had hoped money purchase schemes would take away a lot of the stress and complications involved with final salary provision.
But he added: “People have come to realise that there are some different and very knotty issues around DC schemes – particularly investment, investment choices and communication with members.”
Thomas also endorsed Professional Pensions assertion that some companies were considering closing their money purchase schemes because they were too complicated.
He said: “The responsibilities of trustees are becoming more and more onerous.
“We are getting a lot more inquiries about DC schemes and trusteeship.”
Thomas Eggar Trustees director Vernon Holgate said, on balance, DC schemes were still easier to handle than DB plans.
But he said the inherent complications in handling occupational DC schemes were becoming clearer.
“In a DC scheme you don’t have the work around assets, liabilities and funding, but you have an increased obligation and involvement in relation to investment choices and making sure members have facilities necessary to make proper, sensible choices.”
Holgate also said the administration requirements for DC schemes were much more complicated.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.