Employer covenant is top risk facing DB schemes amid Brexit concerns, finds PTL
Concern about the potential impact on employer covenants has been rated the top risk for defined benefit (DB) schemes, according to a PTL survey.
The professional trustee firm's fifth survey on the biggest risks facing DB schemes in January found 26.1% thought this to be the case, up 1.8 percentage points from the last analysis conducted in October 2018.
Nevertheless, this number has fallen since May last year, when it was 27.6%.
In January, the second top risk identified was the investment implications of Brexit at 16.7% - this has been among the top three concerns since the survey was launched in July 2017.
Cyber security, new deficit funding rules, guaranteed minimum pension (GMP) equalisation, and a change of government were all at 8.7%, ranking in joint third place. In the October survey, these figures rested at 11.3%, 6.2%, 8.5% and 6.2% respectively.
When the survey was first conducted in July 2017, the top risks identified were longevity increases and Brexit investment implications, both at 14.6%. Just 6.5% of pundits identified longevity increases as a top risk in the most recent survey.
Meanwhile the bottom risk identified by respondents in the latest survey was the General Data Protection Regulation (GDPR), at 0.7%, down from 1.1% in its October analysis.
Concerns over compulsory scheme mergers has almost tripled, increasing from 1.1% in October 2018, to 2.9% in January this year.
PTL managing director Richard Butcher said the January results have uncovered some "fascinating findings", but should not be taken "at face value".
He added: "While direct concerns about Brexit and government are not rising significantly, the things that they impact are. It's clear that the unclarified terms of Brexit are causing an ever-increasing circle of uncertainty over everything in its path."
He also noted that, "thankfully", GDPR and cyber security concerns are down.
"GDPR is now behind us in terms of stepping up to the plate to meet the standards laid out, while a bold response from the media and industry on cyber security ensured the threats were laid bare.
"Pension savers, members, trustees, employers and schemes were able to educate and be educated, and take action as a result."
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