Over half of pension schemes targeting self-sufficiency – Barnett Waddingham

Over half of DB schemes are aiming for self-sufficiency, a recent poll by Barnett Waddingham has revealed.

A survey at the firm’s annual London investment conference on Thursday (23 January) found 52 per cent of attendees’ schemes were targeting runoff/self-sufficiency, compared to 39 per cent aiming for buyout and 3 per cent looking to commercial consolidators.

In contrast, Barnett Waddingham’s 2019 poll results found buyout to be the top choice, at 56 per cent, versus 47 per cent wanting self-sufficiency and 2 per cent a commercial consolidator.

Fifty-four per cent of attendees polled stated their scheme was more than 10 years away from their journey plan objective, while 32 per cent said they were fewer than 10 years from their goal, and 7 per cent fewer than five years. Five per cent stated they had an open scheme with no current end objective, and 2 per cent considered the end result too far away to think about now.

Last year, most respondents were five to 10 years away from their objective, at 43 per cent, while 38 per cent more than 10 years away, 9 per cent within five years and 11 per cent unsure.

Speaking at the conference, Barnett Waddingham principal and senior investment consultant, Dave Moreton, challenged the assumption that once a scheme’s journey plan is decided, it no longer needs continually monitoring. Instead he recommended checking if the scheme is still on course with its journey plan at every triennial valuation.

“Even if financial assumptions all work out, the target you are aiming for may no longer fit. You should set your destination and have good idea of when you will arrive but in truth you may not arrive exactly when you think. You may have to change course to keep on track,” he warned.

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