Research: Defined benefit trust-based pension schemes research

This report summarises the findings from the 2018 quantitative survey among defined benefit (DB) schemes, conducted on behalf of The Pensions Regulator (TPR). Its main objective was to provide a performance measurement against seven of the nine principles of the DB funding code of practice, among both trustee boards and employers of DB schemes.

Key findings

• Nearly all trustees interviewed (92 per cent) and 87 per cent of employers said they had read the DB code of practice or a summary of it provided by their adviser.
• In relation to the Working Collaboratively principle of the code of practice, the majority of schemes met each of TPR’s expectations asked about in the survey. Trustees of small schemes performed worse than large schemes on engaging with the employer before starting the valuation process.
• 80 per cent of trustee boards and 72 per cent of employers reported that they undertake activities to establish the employer’s risk tolerance.
• The vast majority of schemes have identified which employer(s) are legally liable to support the scheme, while fewer schemes had a defined aim for a journey plan.
• 62 per cent of trustee boards had undertaken at least one activity to ensure that the pension scheme is treated fairly amongst competing demands on the employer.

The survey findings are the result of 400 interviews with 250 trustees and 150 employers.