A better future for members and sponsors
DB consolidation: when, not if
07 Feb 2018 - Estimated reading time: 10 minutes
Consolidation of Defined Benefit (DB) schemes is a subject that’s been gaining momentum and is unlikely to abate. Due to high profile scheme failures and headlines about the plight of members, the prevailing view is that the DB market, particularly for small schemes, could function better if the inter-related factors of scale, poor governance and high costs are tackled.
Consolidation comes in many shapes and sizes. Some forms, such as consolidation through insurance companies or the Pension Protection Fund (PPF), are tried and tested. Some are emerging trends such as using DB master trusts. Yet others are currently only figments of the imagination, such as the Pensions and Lifetime Savings Association (PLSA) superfund.
In this paper, we seek to highlight some of the main forms of consolidation and how they can help DB schemes. The Department for Work and Pensions' (DWP) forthcoming white paper will be here soon. Now is the time for the industry to be clear on how best to adapt the rules to give DB schemes, sponsors and members the help they need.
I hope you find this report interesting and informative. Please contact us if you would like to discuss any aspect of our report in more depth.