The DB taskforce was set up to identify the challenges facing DB schemes and the impact they have on members.

Last week Ashok Gupta used his platform at the PLSA conference to launch the interim report of the DB Taskforce that he chairs.

Gupta professed that the Taskforce was undertaking an important mission as their initial findings were that the DB "system is not working as it should," and that members benefits were suffering because of this.

Gupta went on to claim that the DB system was too fragmented amongst small schemes unable to benefit from economies of scale, and that consolidation, similarly planned for the Local Government schemes, will be vital in the private sector as well.

Regulating to "the lowest common denominator" has also become wholly inflexible, and the current approach to benefit change is too rigid and is creating unnecessary costs that could be avoided.

Gupta also claimed that the industry has neglected to fully educate their members that the risk of scheme collapse ultimately lies with the members themselves. Studies showed, for example, that 70% of members were incorrectly under the assumption that 100% of their benefits we protected by the Pension Protection Fund.

The DB Taskforce will publish its final report at the PLSA's Investment Conference in Edinburgh next March.

First published 24.10.2016

neil.blain@wilmingtonplc.com