Pension schemes remain confident that they can continue to meet payment obligations to members despite the current crisis, according to new research.

The survey, conducted by the Pensions and Lifetime Savings Association (PLSA), revealed that 85 per cent of schemes were very confident that they would be able to meet obligations, and the remaining 15 per cent were “fairly confident”.

Furthermore, almost all schemes (99 per cent) stated that their contingency plans were coping well with the current crisis, with almost two thirds (62 per cent) reporting that Covid-19 has had little impact on the day-to-day running of the scheme.

Issues that were reported were primarily related to the pressures of remote working, with 33 per cent reporting difficulties serving member requests, and a further 22 per cent noting staff shortage issues.

However, many schemes have already made changes to their operational processes to further mitigate the potential impact.

This includes changes to the receipt of communications from members or employers, cited by 50 per cent of schemes, contractual decisions such as signatures (49 per cent), and processes to protect savers from being scammed (23 per cent).

The report suggested that these changes have improved scheme coping abilities, with 39 per cent of schemes stating that Covid-19 had little impact on the day-to-day running of schemes when the survey was initially conducted in March (62 per cent in April).

While the majority (50 per cent) were confident that current operating procedures would be sustainable for six months or more, 8 per cent of schemes noted that their current operating procedure would not be sustainable beyond three months.

PLSA director of policy and research, Nigel Peaple, added: “The lockdown has created substantial pressures on many organisations but I am pleased to say that our survey finds that all the schemes which responded said they were confident of meeting payment obligations.

"Encouragingly, as the lockdown has continued, initial concerns among some schemes have tended to ease."

Further improvements have also been seen in schemes’ confidence in their sponsoring employer, as 45 per cent of schemes stated that they were not concerned at all in mid-April, compared to 29 per cent in March.

Peaple added: “We hope that this news will be reassuring to pension savers. Our members are focused on looking after people’s savings so they can have an adequate income in retirement.

"Against an incredibly challenging backdrop for workers, employers and especially those providing vital care, people can take some comfort knowing their pension savings are secure.”

The survey also explored the impact of the pandemic on member behaviour, however, the majority (74 per cent) of schemes reported no change, with just 1 per cent of members stopping, and 3 per cent levelling down, their pension contributions.

Furthermore, half of schemes stated that there was no change in the volume of member enquiries and while 17 per cent of schemes reported a dip in calls, a further third of schemes reported a modest increase in member queries.

Of those who experienced an increase in member queries, 83 per cent felt these had increased by, at most, 15 per cent, with just five respondents in total (17 per cent) stating that member queries have increased more than this.

The majority (89 per cent) of the these queries were prompted by Covid-19 however, with media headlines prompting a further 25 per cent of enquiries.

Meanwhile, despite a series of warnings over an increased risk of pension scams amid the current crisis, just one scheme reported seeing an increase in suspected scam activity.

Furthermore, 81 per cent of schemes have not yet changed their transfer policy as a result of Covid-19.

Of this subset though, the majority (87 per cent) had put a temporary 'halt' on transfers, while 20 per cent had introduced additional checks to combat potential scam risks.

The report also emphasised that savers must remain especially vigilant, with financial criminals and scammers “known to ramp up activity during times of heightened anxiety”.

Share Story: