Over two-thirds (67%) of DB pension scheme members say their key pension priority is having confidence that it will be paid for life, according to research in a paper from Hymans Robertson. Trust in the organisation managing their pension was also a major priority for over half (54%) of members while nearly two thirds (60%) were supportive of a DB scheme running on to generate surplus. The research was undertaken by the leading pensions and financial services firm as part of its Excellence in Endgames campaign. It aims to understand the motivations and concerns of DB Pension Scheme members around their pension and the schemes’ endgame decisions. The findings highlight the value members see in their DB pensions and the critical importance of clear communication and education about long-term security whether from the employer or in the context of a move to an insurer.
When asked about their DB scheme being transferred to an insurance company, member views were mixed, reinforcing the importance of communication and education by DB schemes undertaking a buy-out. A quarter (23%) said they wouldn’t mind their pension being transferred as long as it remains secure, whilst 14% would feel more financially secure with an insurer; both results reinforcing security as a priority. Just under half (43%) said they were unsure about moving their benefits to an insurer while a third (31%) had concerns such as the loss of flexibility or valuable options, customer service, missing out on pension increases and losing an employer link.
The research also found that members are open to schemes running on. Nearly two thirds (60%) of members said they would support their scheme running on to try and generate a surplus through long-term investment risk. Unsurprisingly, well over half (58%) believe surpluses should benefit members directly and just over a quarter (27%) think surpluses should remain in the scheme to improve security. Only 7% said employers should be the sole beneficiary whilst a fifth (20%) think both members and employers (20%) should benefit.
Commenting on the findings and what Trustees can learn from them about considering member views, Laura McLaren, Partner and Head of DB Scheme Actuary Services, Hymans Robertson, says: “Members want to feel reassured that their benefits are safe above all else. However, getting support for decisions can be complicated by gaps in member knowledge and understanding. The security members seek isn’t just a technical outcome, it’s an emotional one. That’s why it’s crucial for trustees to actively consider member views, bridge knowledge gaps, and communicate the scheme’s endgame journey in ways that are clear, accessible, and genuinely aligned with members’ needs.
“Understanding the unique dynamics of each scheme is essential for trustees and sponsors in delivering the best outcomes for members. Speaking to member-nominated trustees or member consultation can add value by bringing direct insight into the concerns and priorities of the membership. By taking these views into account, trustees can better tailor their strategies and communications, ultimately fostering greater trust and engagement among members.
“When it comes to endgame decisions for a scheme, there is no single definitive answer about which endgame option members prefer. This will be shaped by both scheme-specific and individual circumstances. Our research findings offer reassurance that, when options are clearly explained and understood, members generally show openness to a range of possibilities. This emphasises the call to action for trustees and sponsors to pause and consider the full range of endgame options and find the right fit.”
Commenting on the mixed views of members about risk transfer and the need for education, Donna Prince, Head of Member Experience, Hymans Robertson, says: “Our research provides valuable insight into how a member feels about their pension, particularly when looking at the various decisions trustees and sponsors make to better protect their members’ benefits. Whilst trustees and sponsors receive training and professional advice on the various options available to them members do not. So, we can’t assume that members understand the protections or benefits offered by options such as insurance or running on.
“Beyond insurance pricing, factors such as flexibility, customer service and the overall journey they are on are important to members. Trustees should consider this when selecting insurers and navigating their approach. They must ensure they carry out appropriate due diligence on the administrative capabilities and the member experience provided by the insurer. For schemes running on, it’s important for trustees to maintain a high-quality member experience. To achieve this, they should ensure they have a robust framework and reporting in place to monitor the scheme’s administration services.
“Communications we are providing to members must also be a focus, to be sure that, regardless of the endgame journey, members have reassurance, clarity and comfort. Ultimately, members want confidence in the security of their pension benefits for the long term alongside trust in the organisation managing their pension. It’s vitally important to get the member experience right.”
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