Trustees should not suspend DB to DC pension transfer activity following the recent GMP equalisation ruling, say this week's Pensions Buzz respondents.
The 94 respondents also answered questions on their positivity about the outlook for pensions in 2019, and whether they think the contribution levels of highly compensated employees should be linked to the contribution levels of lower-paid staff.
They were also asked if they agree with MPs that HSBC has a moral imperative to drop pension clawback rules, and whether auto-enrolment obligations should be simplified.
To see the results in full, click here.
The majority (71%) of this week's 94 respondents did not think that trustees should suspend DB to DC pension transfer activity following the recent GMP equalisation ruling.
Of these, one said: "Many transfers are not affected by the ruling. Why stop all for the few?"
Another said: "Schemes and employers need to find appropriate pragmatic ways of speeding up and simplifying GMP equalisation rather than finding excuses for not doing it. Explain to members the basis on which they are being offered transfer value so they or their adviser can assess if it is right for them."
Some 18% did agree that trustees should suspend the activity, with one commenting: "DB schemes are better than DC schemes. DC schemes were a clever ploy to shift responsibility to the employee!" Another suggested it was a "no-brainer".
Just over a tenth (11%) were unsure. Of these, one said: "The answer should be scheme specific - it very much depends on the circumstances under an individual scheme. Like all transfer activity - there isn't a one-size-fits-all solution."
Respondents were divided on this question, with 45% saying they were not positive about the outlook for pensions in 2019 compared to 41% who were. One who was not positive said: "Don't expect much to happen because there are too many other priorities for government." Another added: "It will remain a political football."
A number of respondents cited GMP equalisation and Brexit uncertainty as reasons for why they are not positive about the 2019 outlook.
Of the 41% who were positive, one stated: "Always positive about pensions! Think much has been achieved over the past few years and, although there is still masses to do, things are moving in a positive direction."
One respondent said: "It's all about opportunities to move forward at the moment. The ability of government and Industry to execute collaboratively will be the proof of the pudding."
Just 14% of respondents were unsure. Of these, one said: "Cannot be sure with Brexit and everything going on."
Another stated: "Not envisaging a year of major change in UK pensions, but consolidators, if properly regulated, could be a big win for the industry."
Two in five respondents (41%) agreed that contribution levels of highly compensated employees should be linked to those of lower-paid staff. One stated: "Everyone should get the same percentage of salary. Senior should get no special treatment."
Another said: "But through salary. If the highest paid employee was limited to a multiple of 20 times the lowest paid, there would be greater incentive to ensure that everyone's contribution was fairly valued."
Some 39% did not agree, however, with one saying: "We need to look at the proportion of total compensation that is in the form of pension provision and make sure that is reasonable. The reasonable proportion for high-paid individuals may well be different to the reasonable proportion for low-paid individuals."
One respondent commented: "The reality is that employers need to set levels in a competitive environment."
"Not at all. There needs to be ways of attracting and retaining high quality staff," said another.
A fifth said they were unsure, with one commenting: "Could work, but as incentive scheme executives would prefer bonus to higher pension contributions."
Over half of respondents did not agree with MPs that HSBC has a moral imperative to drop pension clawback rules.
One said: "The scheme has been designed so that state benefits were not duplicated. Its existence was communicated to members and the scheme financing reflects this. Removing the state pension offset will add significant costs to the scheme - are the MPs going to pay it?"
Another said: "The UK pensions world is highly restricted by codified laws. If MPs think the laws are not powerful enough to deal with HSBC, they have the power to change the law."
A fifth (21%) of respondents did agree, however. Of these, one said: "Clawback of a state provided benefit was always an outrageous policy. There should be a law against it."
Another added: "If MPs think this, then they should legislate accordingly."
Some 27% of respondents were unsure, with one saying: "If it was always a part of scheme design then why should it be changed? If it was grossly miscommunicated, then maybe."
The majority of respondents (62%) agreed that auto-enrolment obligations should be simplified for all employers.
Of those, one said: "Think we should be on a continuous drive to simplify pensions. Complexity adds cost and just confuses people, leading to errors by employers. Simpler it is the easier it is to comply, meaning less work for TPR." Another added: "This is the current best of a bad bunch. Things will not be right until mandatory contributions are put in place with absolutely no opt out."
Just 1% thought it should be for large employers only.
Just under a third (31%) said obligations should not be simplified however, with one commenting: "Actually I think opting out should become more complicated to put employees off opting out."
"Surely it should all be up and running by now - business as usual - and if it ain't broke, don't fix it," another added.
Just 6% of respondents did not know.
PMI president Lesley Alexander and the institute's immediate past-president Lesley Carline talk about the challenges of Covid-19 and the opportunities and challenges the industry faces in the future.
The Pensions Administration Standards Association (PASA) has announced global consultant Deloitte as its expert knowledge provider for data.
This week’s top stories included further support for an overhaul of the pension tax regime, while the Treasury confirmed the Retail Prices Index will be reformed by 2030.
XPS Pensions posted a 9% increase in revenues during the six months to 30 September – a rise driven by a number of large client wins.
Here they are - the winners of the 3rd annual Women in Pensions Awards...