Pensions - Articles - Hymans Robertson comments on trustee research from tPR

 “As today’s report has shown, the world of a trustee is incredibly complex and the industry needs to work hard in reducing the burden. Trustees need more help in guiding them to focus on matters that will make the most difference in member outcomes. Having a strong focus on strategy and risk will help them to manage the key risks – for example, the risks arising from cashflow negativity. Specifically, DB schemes are looking up at a mountain of cash payments – paying out £20bn p.a. more is coming in and with this rising steeply to £100bn p.a. Yet only 4% of Trustees have this on their radar as a significant strategic risk. Having an income informed investment strategy can mitigate the risk of capital loss – forced sale of assets at a bad time – significantly.

 “What the report also indicates is the changing dynamics of the industry. DC is clearly the poorer cousin of DB schemes, with almost five times the amount of time spent on DB matters. With the future challenge of averting a slow motion car crash of savings inadequacy, schemes should be looking to increase their focus on DC and possibly separating out DB and DC meetings in Hybrid schemes.”