Pension scheme sponsors in the UK are less concerned with whether their scheme is doing the right thing for its members than their international counterparts, State Street Global Advisors (SSGA) has revealed.

In its Global Retirement Reality Report, SSGA found that employers sponsoring a pension scheme felt that the most important factor in their sponsorship was recruiting and retaining talent, with 40 per cent citing this as the most important, while 24 per cent said that it was doing the right thing for its employees.

This contrasts with the attitude taken in the US, Netherlands and Australia, where 64 per cent, 43 per cent and 37 per cent of sponsors respectively cited doing the right thing for scheme members as their top priority.

UK pension scheme sponsors were more confident that members will be able to afford retirement than the members themselves, with SSGA finding that 40 per cent of UK scheme sponsors believed that members would be able to afford retirement, compared to 28 per cent of members.

The majority sponsors (60 per cent) also felt that it was the responsibility of members to ensure that they have an adequate income in retirement, with just 18 per cent believing it was the responsibility of the employer.

Furthermore, 91 per cent thought that it was the employees should have some responsibility in sourcing pension advice, while 71 per cent believed the sponsor should.

Making sure that the plan was easy for the employer to implement, maintain and monitor was the most popular factor considered when selecting a provider, with 40 per cent selecting it, while making sure it was easy for employees to use and understand was second with 27 per cent.

UK sponsors still perceived cost as the main barrier to potentially failing to implement ESG considerations into their plan in the near future, with 47 per cent ranking cost as the main concern in this area - above limited product availability (36 per cent) and detrimental impact on returns (27 per cent).

In conclusion, the report stated: “As the DC market in the UK continues to grow, we are seeing a greater acceptance that responsibility for retirement provision sits with the individual saver more than anyone else.

“However, plan sponsors still use pension schemes as an important tool for recruiting and retaining talent. We are seeing schemes outsourcing various elements of plan design to providers and master trusts to help meet these goals.”

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