A third of trustees believe that their employer could contribute more to their defined benefit pension schemes, up from around a quarter last year according to Baker Tilly.

In its Pension Scheme Trustee Confidence Survey 2013 which recorded the views of 68 pension scheme trustees, Baker Tilly found that only 54% of respondents believed their employer was contributing as much as it could to the scheme, down from 71% in 2012.

Trustees are more confident about the strength of the employer covenant supporting their scheme than they were in 2012. Sixty-three per cent of those surveyed said they believed the employer covenant had strengthened and only 30% said it had weakened.

With regards to monitoring the employer covenant, half-yearly reviews rose from 14% to 27% whilst quarterly reviews fell slightly from 30% in 2012 to 28% in 2013 and annual reviews fell from 52% to 43%.

Baker Tilly’s head of covenant assessment services Bruce Mackay said: “The growing confidence expressed by trustees in the covenant backing of employers is welcome, but trustees need to ensure they effectively monitor the covenant on an on-going basis.

“While The Pensions Regulator (TPR) has recently adopted a more flexible attitude to the length of recovery plans, the proportion of recovery plans of 10 years or less remained static at around two-thirds. The percentage of recovery plans of over 15 years – the category that might be expected to rise in light of TPR’s more pragmatic approach – actually fell from 11% in 2012 to 7%this year.”

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