The most common underpin type in risk transfer and consolidation is defined contribution (DC) with a defined benefit (DB) underpin, research from the Society of Pension Professionals (SPP) has suggested.

More than half (53 per cent) of those polled said DC with DB underpin was most common for them to see in relation to moving towards DB buyout or DC consolidation.

In contrast, just over a quarter (27 per cent) of respondents said the type of underpin they most regularly see was DB with a DC underpin, while 18 per cent opted for DB with DB underpin.

In addition to this, the poll asked respondents if they thought scheme members would prefer their converted benefits to be entirely DB, entirely DC or a combination of DB and DC.

Almost half (46 per cent) of respondents said a combination of DB and DC, whilst 34 per cent chose DB and 20 per cent opted for DC only.

SPP event chair and Independent Governance Group trustee director, Akash Rooprai, said: “The fact most pension professionals at this event said that DC with a DB underpin is the most frequently used type of underpin very much reflects the market at this time.

“In relation to converting benefits, nearly half of those polled believed that a mixture of DC and DB benefits is what they thought scheme members would prefer, and this probably reflects what they are used to.”
 

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