Paying actuaries more money does not lead to better services for schemes according to PP research.
Respondents were divided on whether master trusts are the next time bomb for pensions while two thirds of those surveyed said the industry was obsessed with deficits in defined benefit (DB) schemes.
More than half of schemes also said they were undergoing a risk reduction exercise or considering one within the next 18 months.
Just over half (53%) of Pensions Buzz respondents said that paying actuaries higher fees did not benefit their schemes in terms of the service they received.
It came on the back of research that revealed schemes paying actuaries more did not mean they were getting better value for money than a scheme paying lower fees.
Many of the fees charged were the result of legislative requirements such as triennial valuations and transfer value requests, it was argued.
A commentator said: "The rule of thumb for a scheme is to do as much as possible with its own staff. If your actuary suggests doing something extra, there is a high probability this is just a way of getting more money from you."
Another respondent was more philosophical and observed one could get good or bad value at any price.
Just one in eight said schemes did get more value from paying higher fees. "Generally you can get more from your actuary if you pay them more. The actuarial firms have become a lot more business/profit focused in the last few years," said a pundit.
A sizable minority of 35% were undecided.
People were divided on whether master trusts were the next potential scandal for the industry with a greater number (35%) replying they were not a source of concern.
However the answer for why that was the case varied from some saying they were just a vehicle to others arguing small master trusts were the problem.
One supporter said: "If we look to the Australian market as evidence, their master trust offerings are superior to that of the average pension scheme in the UK."
The scale that they would bring to the defined contribution (DC) marketplace would reduce asset management fees for members and also remove platforms that charge excessive fees, the same person continued.
The 28% of people who thought master trusts were a problem (28%) gave various answers such as entry to the market being too low, a lack of regulation and lack of transparency on fees.
Nonetheless 37% said they were undecided.
Two thirds of respondents thought the sector was obsessed with deficits of defined benefit (DB) schemes.
Many said that trustees and sponsors needed to take a longer time view to improve funding levels at schemes and improve outcomes for members.
However one commentator observed deficits were complex to tackle and said: "Any deficit appears to be bad, regardless of the amount of deficit, timeframes and any additional financial security commitments. Very difficult to be precise in funding though while so many longevity questions remain unanswered."
Others said that no one seemed to understand that DB schemes were long term ventures, and that instead deficits were calculated on the basis that money needed to clear them would be required the following day.
Just over a quarter thought the focus on deficits was justified as too many schemes were severely underfunded, however. "Deficits are a key issue for a lot of schemes - the need for future funding to be available to pay the members pension is a key concern," said a pundit.
One in eleven were undecided.
Of the 136 respondents surveyed, 56% said their scheme was undergoing a risk reduction exercise or considering one in the next 18 months.
One pundit said this was because finance directors had little control over final salary scheme deficits but had more influence over corporate planning. "So generally the more that can be down to reduce risk exposure the better and hence drive to look at risk reduction exercise," the person added.
Other reasons given for doing risk reduction exercises were they helped employers and trustees to evaluate the longer term aims of delivering benefits to members.
Others suggested said it was a continuous process and constant obligation.
Over four in ten were not looking at risk reduction over the next 18 months. A major concern was cost. "We don't want to pay an eye-watering amount of money to an insurance company to do something we can perfectly well do ourselves," said one respondent. "Our employer's financial health matters more to us than the financial health of the insurance companies."
Another said a better course of action was to do asset and liability matching, which was not specifically a risk reduction exercise.
NOTE: Respondents could choose multiple responses for this answer so the chart above is based on the % of total answers selected by respondents - and does not represent the percentage of respondents choosing each option
Hedging interest rate and inflation risk (56%) and managing liabilities through pension increase exercises (PIEs), enhanced transfer value (ETVs) and early retirement (50%) were the two most popular risk reduction strategies.
Respondents could also choose from the following options: longevity management exercises such longevity swaps/insurance, ‘top-slicing' annuitisation or medically underwritten annuities; increasing returns through alternative assets and making the most of illiquidity; sponsor pledged assets; buyouts; buy-ins and other.
Increasing returns through alternative assets and making the most of illiquidity was the third most popular strategy according to 44% of those surveyed.
One commentator said: "The difficulty with risk reduction is to evaluate whether there is value for money for your scheme and exactly when to implement."
Other respondents cited increasing gilts holdings, reducing levels of future benefits and trivial commutation exercises as additional ways to reduce risk.
To read the survey results, click here.
This week’s top stories included the rejection of an automatic guidance amendment in the Pension Schemes Bill, while The Pensions Regulator posted a sharp increase in the use of its powers.
The majority of the pensions industry agrees an eventual net-zero target should not be mandated for schemes as part of the Pension Schemes Bill, according to a Professional Pensions poll.
Defined benefit (DB) schemes that provide GMPs must revisit and, where necessary, top-up historic cash equivalent transfer values (CETVs) that have been calculated on an unequal basis, a landmark court judgment says today.
Local Pension Partnership Administration (LPPA) has become the latest organisation to join the Pension Scams Industry Group (PSIG) forum.
Two-thirds of UK fund managers are reducing investments in companies that fail on diversity and inclusion scores, according to a survey by Edelman.