Employer covenant risk, longevity and Brexit are the main concerns among defined benefit (DB) pension scheme trustees, a survey has discovered.
Independent trustee and governance services provider PTL questioned trustees in June for its DB Risk Survey on what they see as the three biggest threats to their defined benefit schemes.
Employer covenant risk, longevity and Brexit were top concerns collecting more than 14% of the vote each. Inflation was close behind at just above 12%.
Cyber security and the new deficit funding rules were further down the scale of trustee concerns at around 7% and 6% of votes, respectively.
PTL managing director Richard Butcher said was not surprised by the results at the top end of the table.
“What’s more interesting are some of the risks lower down the table,” he added. “Brexit is a big story but one that wouldn’t have featured until a couple of years ago, this result reflects the uncertainty we all feel about the future.
“Inflation remains a key concern and there are indicators that it is expected to rise in the medium/longer term.
“GDPR and Cyber are newer risks to trustees and what’s interesting about them is that if combined, they are, after all, both IT risks, they would be equal with covenant at the top end of the table. They are certainly major risks and trustees need action plans for mitigating them now.”
This is the first in what is planned to be a quarterly study with the next instalment due in the fourth quarter.
