The findings came when Aon polled the almost 500 attendees of its annual conferences which took place at six venues across the UK.
Aon asked attendees about their views on the future of pensions in the UK. An overwhelming 94 percent of respondents indicated that UK pensions required some form of further change, with 31 percent expressing pessimism regarding the system. Despite the unprecedented amount of regulatory change experienced in the last few years, just 6 percent of respondents were optimistic about the UK pensions system as it currently stands.
These responses also reflect the findings of the Aon Global Pension Risk Survey (GPRS) 2023/24 which highlighted the industry’s concern with the risk posed to trustees and sponsors from the pace and volume of regulatory change that has recently occurred. This concern featured in the top four for the pensions industry - ahead of more traditional defined benefit (DB) pension scheme risks such as liquidity and sponsor covenant.
When respondents were asked in which areas they wanted to see the Government and the Pension Regulator make changes, the responses were wide-ranging. The top four priorities (respondents could select more than one option) were cyber risks (42 percent), defined contribution (DC) small pot consolidation (36 percent), dashboards (34 percent), and DB refunds of surplus (34 percent)
Matthew Arends, partner and head of UK retirement policy at Aon, said: “Despite significant regulatory change to the UK pensions system in the last few years to both DB and DC pensions, it is sadly telling that over 90 percent of respondents stated that the UK requires yet further changes to its pension system.
“These results are all the more pertinent given that Aon’s Global Pension Risk Survey showed that regulatory burden and political uncertainty are big concerns for schemes. Respondents to the GPRS highlighted both the volume of regulatory change already required of schemes and the full pipeline of changes that are on the way as creating significant resource challenges. Even with this background, our pension conference attendees overwhelmingly responded that further change is needed.”
Matthew Arends continued: “Navigating regulatory volatility is inevitably a concern for schemes, with trustees and sponsors facing challenges in ensuring risks and opportunities are prioritised appropriately. Even so, further changes to the system are still perceived as a way to provide better outcomes."
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