Final salary pension schemes in the UK will not survive their current crisis and will be replaced by DC and hybrid schemes according to research conducted among pension fund trustees, consultants and fund managers at The Bank of New York’s Pension Fund Summit held in London.
Only 3 per cent of delegates believed that final salary schemes will continue to be offered to employees, while 52 per cent predicted that future company schemes will operate on a DC basis and 36 per cent decided a hybrid basis was the most likely alternative.
The biggest issues facing pension fund trustees is under-funding and longevity according to 52 per cent of respondents while 35 per cent said that seeking better investment returns was their major concern.
When questioned on investing in alternatives, such as hedge funds, 47 per cent said they had chosen this route to diversify their assets while 31 per cent said they were looking for higher investment returns.
Following the publication of the IMA’s proposed enhanced disclosure code, 36 per cent of respondents are more likely to support commission sharing arrangements as a method for their fund managers to pay for independent and third-party research.
A panel discussion on this topic (CP176) also expressed the view that within five years, most investment banks may no longer publish their own research.
When it came to the most important factors when administering their pension scheme, 43 per cent of delegates stated quality record keeping while 35 per cent selected accurate and timely reporting.