The top post-Brexit concern among defined benefit pension plans is the need for employers and trustees to discuss funding impact, cited by 58 per cent of respondents to a recent Aon Hewitt survey.
The survey, which polled more than 200 pension plan representatives about their concerns following Britain’s decision to leave the European Union, also found concern about the impact on employer covenant (47 per cent) and the need to review interest rates and inflation hedging (44 per cent).
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“Despite the uncertainty, schemes are recognizing that action does need to be taken,” said John Belgrove, senior partner at Aon Hewitt. “They see the need for tools to enable them to monitor their position in the volatile markets and also the need for tailored advice. Our research since the vote has shown that the outcome for schemes has varied considerably – some even improving their funding position – but with the outcome particularly depending on their level of hedging to date.”
For respondents that also provide a defined contribution pension, 64 per cent said they want to review the default investment option, 58 per cent want to understand the impact on their members’ plans and expected retirement incomes; and 50 per cent want to prioritize member communications.
“DC members face a significant change to their saving environment,” said Lynda Whitney, partner at Aon Hewitt. “That makes clear communication from trustees or employers to members even more crucial than normal.”
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