Current pension scheme solutions are "sub-optimal" and the pensions industry should be seeking structures and systems that can deliver better outcomes, a poll has revealed.

Only 21% of Aon Hewitt's pension conference delegates said they felt the current pension system was fit for purpose and that they were satisfied with existing defined contribution (DC) and defined benefit (DB) schemes.

A modest 14% supported the DB Lite proposals, which suggests that most sponsors and scheme feel the future of pensions will have little or no DB exposure.

However, there was widespread support for looking to improve the outcomes from DC schemes, with 34% in favour of the DC Plus work-strand, and 32% in favour of Collective DC solutions.

Aon Hewitt senior partner Kevin Wesbroom said: "It seems clear that the industry believes that we could – and should – try harder to deliver better outcomes for our DC members.

"The broad support for Collective DC solutions was even more encouraging, and significantly more favourable than the generally negative stories one sees about these approaches.

"We pressed our delegates on their concerns about the Collective DC approach – which despite any potential downsides - has the potential to deliver higher, and more stable, outcomes for members than conventional DC schemes."

One of the biggest issues surrounding defined ambition schemes is the concern that future governments would intervene or change policy in a way that adversely impacted employers.

A total of 82% respondents stated that they did not trust the government to not intervene as they have seen "the pensions goal posts" move too many times to feel confident that this will not happen again, Wesbroom said.

He noted that delegates were more balanced about the prospect of having to explain what might be called 'soft guarantees' to members – this would be where there is an intention to pay a particular benefit level which might not – in extreme circumstances – be paid in full.

In total, 44% of delegates said they thought this could be overcome, but 56% said it could not.

Aon Hewitt said that this at least indicates that there is hope to address communication issues for the new types of pension approach that the Government is considering.

First published 31.07.2013

monique_simpson@wilmington.co.uk