Trustees are worried that smaller pension schemes could be an afterthought when plans to consolidate DB schemes come to fruition.

During a panel discussion at the inaugural Pensions Age Western Conference, Capital Cranfield head of sole trusteeship, Harus Rai said: "The question mark is, are they going to be interested in smaller schemes that are underfunded with weaker employer covenant?”

PTL client director, Karein Davie hoped this wouldn’t be the case, as she argued that consolidation would be a good option for “a smaller employer who may struggle to get a buyout but wants to move somewhere where they don’t have to rely on their sponsor anymore.”

However, all members of the panel agreed that the issue is not “one size fits all” and it is important for schemes to do what is right for themselves.

Davie continued: “There’s lots of different consolidation options out there and it’s going to be up to people as to what’s right for your scheme.”

Rai added: “I think we need to be careful about saying it’s the only option. There’s other options, there are DB master trusts out. Let’s not forget buy-in and buyout. If the opportunity of a buy-in and eventual buyout, why wouldn’t you do that?”

At the time of writing, the progress towards consolidation has been slow, as no official regulations have been put into place and no scheme wants to take the first step into the unknown.

Rai said: “At the moment it’s ‘watch this space’. Let’s see what happens. Let the first scheme go in and then you can see what’s in it. What process have they taken, what are the hurdles, what lessons can be learned.”

“I think it’s early days to say that it’s the right thing,” Davie added, “but it's definitely not the wrong thing to be thinking about at the moment.”

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