Almost a third (30%) of pension professionals support employers having more power to renegotiate benefits or reduce accrued rights, research from the Pensions Management Institute (PMI) has shown.
Of those, over two-thirds (77%) said it should be allowed to keep stressed defined benefit (DB) schemes out of the Pension Protection Fund (PPF), while 88% agreed if a funding level fell below a pre-determined threshold.
Another 55% said they believe the government should be allowed to revalue preserved benefits and change the indexation of pensions in payment.
The PMI surveyed 235 UK pension consultants, trustees, administrators, actuarial, legal and investment professionals.
Speaking at the PMI's annual conference on 11 May, president Kevin LeGrand said those who wanted to see more flexibility given to sponsors wanted greater security for members.
"This is a big issue that has been debated a lot over the past year or so, particularly in regard to the impact on deficit reduction," he said. "Not surprisingly, there was a strong majority for not allowing employers to renegotiate DB pensions and accrued benefits. The implications here are to ensure that members' benefits are properly protected."
LeGrand added that the findings would inform the PMI's response to the government's green paper on DB reform, which closes to industry responses on 14 May.
The association's research also found a small majority (51%) of its members believe mandatory consolidation of schemes would be appropriate in some circumstances, which the green paper rejected.
Nine in ten of those who agreed, said consolidation should be enforced in the case of an employer becoming insolvent, while 84% said to keep the scheme out of the PPF. Common arguments cited for consolidation, such as to improve scheme efficiency or governance, received 71% and 59% agreement.
However, almost an equal number (89%) said a difference in the funding level acts as a barrier to consolidation, while employer covenants were a hurdle for 83%.
LeGrand said the research demonstrates growing support for consolidation.
"The Pensions Regulator is very keen on consolidation of schemes, and it's gathering momentum," he said. "Respondents were almost 50:50, and slightly in favour overall. That reflects the current state of debate.
"If we asked this question a couple of years ago, we would have got far more ‘no's'. ‘Yes' is now gaining traction."
In March, the Pensions and Lifetime Savings Association (PLSA) DB taskforce advocated a full merger of DB schemes into "superfunds". The process would allow consolidation of schemes while granting employers the opportunity to sever their obligation to the schemes.
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