Pensions: Scoping the future landscape

Eversheds Sutherland’s annual pensions conference throws light on future shape of pensions landscape

Polls conducted as part of Eversheds Sutherland’s annual pensions conference this year have thrown light on what key decision makers within the pensions industry see as the priorities for the future pensions regulatory framework.

Around 400 delegates at the virtual event were polled on questions on key policy areas including:

• climate change legislation
• jail terms for crimes against Defined Benefit (DB) schemes
• automatic enrolment contributions
• new two-track DB funding regime

Headline findings from the conference revealed that 45% of respondents welcomed the forthcoming new climate change reporting obligations on trustees, while 43%, although also in favour, felt that the legislation left too little time for compliance.

On the issue of whether a seven-year jail term as a penalty for crimes against DB schemes was acceptable, too lenient or too punitive, 50% of voters thought that the penalty was too punitive, while 46% felt it was acceptable.

When asked for their views on overall automatic enrolment contributions, an overwhelming 86% of those responding voted for an increase to either 10% of earnings (47% of respondents) or to 12% of earnings (39% of respondents).

In addition, 84% were overwhelmingly in favour of the new two-track funding regime, where trustees are able to choose either a ‘fast track’ or a ‘bespoke’ approach to their DB funding. 71% of those responding said that their scheme would be choosing the ‘bespoke’ approach.

Sarah Swift, pensions Partner, Eversheds Sutherland said:

“Delegates at our pensions conference were clearly comfortable with the notion of jail time for causing damage to defined benefit schemes. But when causing death by careless driving can land you only five years behind bars, there are clearly doubts about whether seven years is too tough a penalty. The proportion of schemes represented at our conference who are likely to opt for a bespoke approach under the new proposed funding regime is in marked contrast to the Regulator’s own research which suggests a majority of schemes will be going the fast track route.”

Francois Barker, head of pensions, Eversheds Sutherland said:

“This was our first year of running our annual conference online, and we were delighted that so many were able to join us.  The most interesting poll results for me were on climate change. There was clearly overwhelming support for this initiative amongst delegates, but significant concern at the compliance timescales. For larger schemes and master trusts, these timescales could mean getting their TCFD reporting lines and governance structures in place within a matter of weeks – this will be very challenging.”