Universities Superannuation Scheme (USS) members should be responsible for most of the cost of increased contributions if the scheme's defined benefit (DB) section remains open to accrual, Pensions Buzz respondents say.
This week, 124 participants answered questions on whether divestment campaigns can be deemed unethical, if there has been underinvestment in technology by pensions firms, and if the Spring Statement was good news or bad news for pensions.
Respondents were divided on who should pay for additional contributions to the Universities Superannuation Scheme (USS) if these are required to keep the scheme open to accrual.
However, the results were skewed towards members paying more, with 27% stating they should pay most of the cost and 19% saying they should pay the whole cost. Another 26% said members and employer should make equal contributions.
A number who opted for members alone making increased contributions pointed out it would likely be students picking up the tab if otherwise.
Another added: "The employer (i.e. taxpayers and students) are already paying more than 17%. Any increase should be paid by those who are campaigning so vociferously to maintain their benefits."
One who said the increased costs should be shared equitably said this would be more sustainable, while another suggested a lower tier of accrual should be possible for members who did not want to increase contributions.
Yet, 14% said employers should bear the majority of the cost and another 2% said the universities should pay the whole contribution increase.
One said: "Rules say that increase should be split 2:1 against the employer. Unless a negotiated settlement is agreed, then that should be adhered to."
Two in five respondents were unsure whether divestment campaigns could be considered unethical if the alternative environmental, social and governance (ESG) investments did not deliver as high returns as the divested assets, as the Institute of Economic Affairs argued.
One pointed to the 1985 Cowan v Scargill case where the High Court adjudicated that trustees should not refrain from investing in something deemed unethical if it would be more beneficial to members' financial interests.
The respondent said: "An ESG strategy should be set that demonstrably can be shown to have no impact on return." Another added: "It depends on whether whoever misses out on the returns agrees to it."
Yet, just under a third (32%) disagreed, with some questioning the IEA's use of ‘unethical'. One said it was prudent for trustees to prepare for climate change-related risks: "It is better to regret missing out on some extra growth than regret the value falling."
Of the 28% who agreed with the IEA, one said: "Pension funds need to make returns to pay pensions, not save the world."
Almost three quarters (74%) of respondents welcomed the lack of pensions announcements in the Chancellor's first Spring Statement, arguing it was good news for the industry.
Many lauded the "breather" and "stability" that the pause on policies allowed the industry to have, with one stating: "After a decade of change, it is good to take a pause and reflect on what is working and what may need improving."
Another added: "The government hasn't had a clue on pensions for years. Best they just don't do anything!"
Several others noted the government had other priorities, such as Brexit and Russia, with one adding: "We do not need any more meddling. Get the lunacy of the General Data Protection Regulations out of the way before the next wave of interference and change."
Another 22% of respondents said the statement was neutral for the industry, with one commenting: "There are some things that are just being kicked down the road. They need to be addressed at some point and, the more the delay, the greater the problem (in some instances) they will become."
"Pensions are no longer a major force in Budgets," another said.
Not a single respondent said it was bad news, while just 3% were unsure.
Exactly half of this week's respondents believed there has not been enough investment in systems and technology in the pensions industry.
This is particularly the case with administration firms and older companies, a few participants said, with one stating: "Newer entrants to the market are OK but those with legacy systems have not kept up with IT changes."
Another added: "As defined benefit pensions have been expensive to continue, there is a lack of appetite to fund new technology in the hope it will prove beneficial in the long term."
A further participant said this was "a consequence of a real lack of foresight and creativity".
However, 30% of respondents believed there had not been significant underinvestment, with one arguing there were plenty of tools out there or in development - such as pension scheme website and the upcoming Pensions Dashboard - but "the problem is the lack of willingness of the members" to use these.
Another said it was not unsurprising as "it is what you would expect when there are charging caps and a desire that money spent goes to members' benefits not in the running of the scheme".
Another two in five respondents were unsure, with one saying it is a mixed picture.
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