The average proposed timescale for UK pension schemes to reach their long-term objectives, including buyout and self-sufficiency, has increased by around one and a half years since 2009 according to Aon Hewitt.

In its latest Global Pensions Risk Survey 2013 of 220 UK plans, Aon Hewitt stated the timescale for reaching long-term objectives has risen from 11.3 years in 2009 to 12.8 years in 2013. In addition, 44 per cent of the respondents have frozen their plans as part of initial liability management efforts, an increase from 21 per cent in 2009.

Aon Hewitt partner Kevin Wesbroom said: “As liability levels have continued to rise, many pension schemes have been treading water and drifted away from their long-term targets.

“Given this situation, schemes need to ensure that they are ready to take short-term tactical action to help them move towards, rather than away from their future targets. Despite ongoing economic uncertainty, it is feasible to imagine a period of benign asset markets and a reduction in liabilities on the back of rising interest rates. As part of a complete financial management plan, schemes should know what actions they would take in a variety of circumstances including this one.”

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