Over 9 in 10 small businesses support a call for the government to introduce a statutory override for scheme indexation, a survey has found.
Reforms allowing defined benefit (DB) schemes to move from the Retail Price Index (RPI) to the generally lower Consumer Price Index (CPI) would help trustees dodge wading through sometimes complex scheme rules.
However, of the 92% small firms which called for the rule change, most agreed there should be some safeguards in place, according to the Association of Consulting Actuaries' (ACA) biennial survey of 455 firms with fewer than 250 employees.
In the 2016 Smaller Firms Pension Survey, almost a third of respondents (28%) said all schemes should have the option to move from RPI to CPI. However, 29% said this should only be possible if the employer is likely to declare insolvency.
On the other hand, 13% said the move should only be allowed if both the trustees and employers agree, while 22% said members should have the Pension Protection Fund (PPF) option too.
The ACA's chairman Bob Scott (pictured) said the statutory override would be fair and blamed previous pensions legislation for funding problems faced by DB schemes.
He said: "We do not make this suggestion lightly, but it is unlikely that scheme rules were ever intended to tie trustees to an index the National Statistician has described as flawed.
"It is also worth noting that compulsory indexation of pensions was introduced by the Pensions Act 1995 and so we suggest that it would be appropriate for the government to legislate to help address an issue that is largely due to the impact of previous legislation."
The finding will bolster the ACA's campaign for the statutory override to be introduced. In evidence to the Work and Pensions Committee's (WPC) inquiry into DB regulation, Scott said the rule change would allow schemes to increase contributions into defined contribution (DC) funds.
Regulators must act now to impose some "proper regulation" to stop another defined benefit (DB) transfer advice disaster, saysTim Sargisson.
Opportunities for defined benefit (DB) schemes to pursue investment approaches that help repair the UK’s economy cannot stand in the way of improving member outcomes, Aegon says.
More members transferred out of defined benefit (DB) pension schemes in October after September's record lows while values were surprisingly stable, according to XPS Pensions Group's Transfer Watch.
Joanna Smith says trustees will need to accurately identify if covenant issues are short-term affordability concerns, or the start of more material deterioration.
Consumer complaints against firms for misadvised DB transfers also rising