Partner and Senior Investment Consultant. Providing investment advice to trustees and sponsors of pension schemes, helping to secure better and more certain futures for members
Our latest analysis shows running a small DB pension scheme is 4 times costlier than a larger one. This cost gap is crucial for trustees and sponsors to weigh when deciding whether to continue the scheme or opt for a buy-out. Schemes below £250m are unlikely to persist solely based on economics. Laura McLaren commented “Running on beyond buy-out funding is likely to be expensive for small schemes. TPR’s 2014 research found that the mean cost of running a small DB scheme was £1,054 per member, compared with £505 for a medium scheme and £281 for a large scheme. Based on these numbers, our modelling suggests that for small schemes annual expenses are 0.55 per cent of scheme assets, compared with 0.13% per cent for large schemes. The practical costs and challenges of managing a scheme for another 20 years tend to be amplified for small schemes.” https://okt.to/cFzX1N #pensions #finances