Finance directors in the UK are taking on more responsibility for managing the risk of their company defined benefit (DB) schemes, and are driving discussions with de-risking solution providers ahead of trustees, according to Metlife Assurance.

Emma Watkins, director of business development at the risk transfer solution firm, told a press gathering on 30 November in London that there had been a "massive shift" from trustee boards to finance directors taking the initiative over external de-risking discussions.

"Back in 2008, almost in all cases, the trustees were leading on this," she said. "It has shifted to employers who will suggest it to the trustees. So FDs are approaching the trustees and then letting them get on with the due diligence. So when we have discussions (with pension funds) we have all the representatives at the table (from the sponsor and scheme)."

Watkins, who says it was great that sponsoring companies were getting involved in the decision-making process, said that the shift tied in with findings from a recent survey carried out by Metlife into attitudes to de-risking.

The survey found that 34% of Finance Directors saw de-risking as 'very important' to business objectives and that 42% saw it as 'somewhat important'.

Of those organisations with closed DB schemes, 59% of those questioned believed that de-risking was now 'very important'.

Watkins also pointed out the firm believed that the UK had 'lost' up to £1.25bn a year in pension savings since 2008 as companies continued to switch from DB to defined contribution (DC). This was due to the lower contributions made into DC schemes compared to those put into DB schemes.

First published 30.11.2011

mhandzel@wilmington.co.uk