Four in 10 employers believe that their defined benefit scheme funding regime lacks the flexibility to suit the current economic climate, and greater dialogue between sponsors and trustees has been urged as a result of this.

Research from the latest ‘JLT 250 Club’ of around 250 companies with at least 500 full-time employees, showed that employers are currently underestimating their ability to question trustees’ views on funding levels.

JLT employee benefits director Rob Dales said: “In our experience, employers are reluctant to challenge trustees’ views on funding deficits reduction, which are often conservative. The reality is that The Pensions Regulator is always willing to consider well-planned and carefully thought out recovery plans.

“Best practice is to appoint advisers to help identify the best outcome for employees, pension scheme members and shareholders to complement and to challenge the trustees’ verdict to reach the best-informed outcome.”

In the recent Budget, Chancellor George Osborne announced that The Pensions Regulator would be given a new statutory objective to ensure funding arrangement are compatible with sustainable growth for the employer.

Share Story: