Defined benefit (DB) pension schemes continue to demand considerable management attention from sponsoring employers, with 74 per cent of finance leaders describing the associated time commitment as significant, according to research from Standard Life.

The findings come as 67 per cent of DB schemes are now in surplus on a technical provisions basis, compared with 39 per cent at the previous valuation cycle, prompting many employers to review their long-term endgame options.

The survey, covering 100 chief financial officers and finance directors at companies with a DB pension scheme, found that almost half (48 per cent) said they could devote more time to core business priorities if responsibility for their scheme was removed.

Other potential benefits included simpler operations and processes, cited by 37 per cent, and reduced demands on senior management time, highlighted by 35 per cent.

The survey also revealed that 46 per cent of respondents said their DB scheme was a regular agenda item for finance teams, while 42 per cent described it as a recurring board-level focus.

Standard Life managing director for pensions risk transfer and individual retirement, Claire Altman, noted that while improved funding levels had eased concerns over deficits for many employers, for many businesses DB schemes remained one of their most significant responsibilities.

“The change in funding levels means many sponsoring employers now have options and can consider whether they want to continue to shoulder the responsibility for the scheme and run-on or pass the responsibility," she said.

“Both routes involve trades offs but one of the major benefits of the insurance route is a reduction in the time DB schemes take up on management agendas and a greater ability to focus on core business decisions.”

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