Granting statutory protection to pre-1997 benefits in defined benefit (DB) schemes would be an unfair cost to sponsors and would force even more closures, according to this weeks' Pensions Buzz respondents.
The 120 industry commentators also answered questions on the performance and remit of independent governance committees, whether new disclosure rules would improve clarity for members, and if schemes should appoint wealth managers to provide advice to members.
Almost half (48%) of respondents disagreed with providing statutory inflation for pre-1997 defined benefit (DB) rights, as suggested by a peer.
However, another 43% agreed there should be some protection; 21% said to the Retail Prices Index (RPI), 19% to the Consumer Prices Index (CPI), and 3% said there should be a fixed percentage.
Of those who disagreed with protection, several commented it would be unfair to impose the additional liability more than two decades later, and asked who would pay for the increases.
One commented: "Government made the mistake of gold-plating DB schemes when the perception was that schemes had huge surpluses. How could anyone contemplate further gold-plating at a time when schemes have large deficits?"
Another added the post-1997 inflation protection was one of several elements which have "forced UK plc into defined contribution (DC) saving and killed off the DB pension-scape".
Yet, of the 21% who said RPI protection should be given, one commented: "Not inflating them would be criminal."
One who opted for CPI commented failing to provide inflation protection was "shameful".
The largest proportion of respondents (42%) were unsure as to whether independent governance committees (IGCs) had improved value for money in contract-based pensions as the third round of annual reports are published.
Of these, some had no experience, while one said the improvement was "not as much as the charge caps that have been introduced".
Nevertheless, some 32% agreed some improvement had been made; 3% said there had been a lot, while 29% said a little. One in the latter group said: "A lot more work needs to be done though before they add substantial value."
A further said there was a mixed bag of reporting: "Some IGC reports are excellent and some are woeful."
However, over a quarter (26%) disagreed, with one arguing it was "more fiddling about the edges so as to appear to be doing something worthwhile".
Another described the process as "box-ticking" while another said: "Regulations add no value, shock! Also, the Bishop of Rome confirmed not protestant."
Almost half (47%) of respondents disagreed that IGCs should be required to report on social impact investing, as the Financial Conduct Authority (FCA) said it was considering in its business plan for 2018/19.
The regulator is "desperately scratching around for something for [IGCs] to do because they add no value - pretty typical regulatory move," one argued.
Another said: "It's not a scheme's place to invest socially… it's the scheme's place to generate returns. If there is a significant risk from socially irresponsible investments, then factor it in alongside all other investment risk characteristics."
"There is no point; no-one will need it," a further commented. "The focus instead should be on ensuring that so-called green and ethical funds live up to their name."
However, over a quarter (27%) agreed with the FCA's plans - which were originally recommended by the Law Commission - with one commentator saying: "Pensions need to pay more attention to what they're investing in. I'm no advocate of active management but many schemes take passive investing far too literally."
Almost half of respondents (49%) did not believe that mandatory disclosure rules enacted by the government earlier this month would see members receiving clear information on transaction costs.
Many argued that members would probably not read the information or understand it and, even if they did, "they can't do anything about it".
One commented: "Has anyone stopped to think what the members will do with the information when they have it? File it in the big round file on the floor?"
Another added: "It'll just be information overload that a mainly disengaged population will simply ignore, while driving up costs." A further respondent argued: "There will still be too much jargon and prescriptive information."
A more optimistic attitude was adopted by 28% of respondents, however, although several caveated their response with arguments that this alone would not result in clarity.
One said trustees also need to "continue to up their game on member communication", while another said "disclosure needs to be in plain English, non-jargon, and continuing".
An overwhelming majority of respondents disagreed with this peer suggestion that schemes should appoint a wealth manager to provide advice to members.
Over four in five rejected the idea, with many arguing the onus to seek advice should be on the member, with some arguing this would also be an unfair cost on the scheme.
"I question the value such an appointment would add and at whose cost," said one, while another said it would be "another unnecessary expense foisted on the scheme that the member should take some responsibility for".
Another said, if this was to be provided to members, it should be done by the employer.
"The last thing, as a scheme member, that I want is the trustees (who don't know me) appointing a wealth manager (who doesn't know me) to advise me about my so-called wealth," a further commented.
"The obsession with advisers is increasingly unhealthy," a further respondent lamented.
Just over one in 10 agreed, with one stating there should "be clear lines of independence and an emphasis on financial education".
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