Four out of five pension professionals expect the new defined benefit (DB) funding code to have some impact on their pension schemes, with a quarter expecting this to be a significant impact, according to research from LCP.

The poll, undertaken during a recent webinar, also found that around half of respondents had concerns about the extra work required in implementing the new regime, with a third of these suggesting that a new regime is not needed.

However, one in six respondents felt positive about the new regime and saw it as improving the security of member’s benefits, while one in three had not yet decided how they felt about the new regime.

In light of the findings, LCP has urged trustees and sponsors to consider how they would fare against the new expectations and whether action is needed, predicting that as many as half of schemes may currently fail at least one of the fast track tests.

In particular, the firm suggested that pension scheme trustees may want to consider reviewing their scheme investment strategy, considering constraints on the sponsor’s business that are likely from the new regime, and reassessing the covenant support.

Commenting on the findings, LCP head of trustee consulting, Jill Ampleford, stated: “The impact of the new DB funding regime can be very different depending on each scheme’s unique position.

"Many will see not just a change in funding but changes in investment strategy and the approach to assessing covenant support too.

“But for all schemes there will be some work to do. We’re encouraging trustees and sponsors to do the work as soon as possible to understand what the new regime means for them.”

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