Pensions - Articles - 62% of schemes consider trivial commutation for de-risking

 Of those schemes currently considering de-risking solutions, trivial commutation was the most popular with almost two thirds (62%) of schemes considering implementing an exercise.
 
 This was followed by ‘reviewing the scheme’s asset allocation’ (50%), ‘reviewing the current funding policy’ (44%), ‘offering transfer values to members’ (39%) and ‘insurance through a pension annuity buy-in or buy out (23%).
 
 Mark Rogers, Xafinity, comments;

 “Our experience, supported by research of pension schemes covering 260,000 members and assets of £22bn, indicates that de-risking is high on trustee and sponsor agendas and that trivial commutation is often viewed as the natural first step on the journey in light of the Budget changes last year. In particular, trivial commutation can reduce the disproportionately high cost of administering small benefits as well as improving the scheme’s financial and risk position. Whilst these exercises are simple in concept, there are a number of issues that need to be considered in the design and implementation and ensuring members are provided with the right levels of support is paramount to a successful exercise.”