The majority (88 per cent) of defined benefit (DB) trustees have a long-term objective (LTO) in place, although awareness in some areas, such as pensions dashboards, may be lacking, according to research from The Pensions Regulator (TPR).

TPR's DB trust-based pension schemes research, which was conducted between October 2021 and January 2022, revealed that over half (55 per cent) of DB schemes with a LTO are targeting buyout, while 40 per cent were targeting a position of low dependency.

The primary influence on the LTO was the scheme’s funding position, cited by 81 per cent of trustees and 80 per cent of employers, while a further 68 per cent of trustees confirmed that their LTO drove the funding of the scheme, rather than being purely aspirational.

Around 80 per cent of those schemes with an LTO also had a journey plan in place, which were "almost universally" aligned with the technical provisions (91 per cent) and investment de-risking (95 per cent).

However, employer covenant was also a key consideration for scheme trustees, highlighted as a key influence when setting the LTO by 56 per cent of trustees and 64 per cent of employers.

Over half (60 per cent) of trustees also considered employer covenant monitoring "to a great extent" when setting their journey plan, while 51 per cent considered it "to a great extent" when setting the recovery plan, and 47 per cent did so when setting the investment strategy.

In particular, the research found that 90 per cent of trustees were giving consideration to the affordability of the employer’s contributions when setting their recovery plans, while 66 per cent considered the likelihood of employer insolvency.

The research suggested that this may be an area of heightened concern in recent years, revealing that nearly a third (32 per cent) of trustees, as well as 23 per cent of employers, felt that the employer’s ability to support the scheme had been negatively impact by the Covid-19 pandemic.

Furthermore, although some respondents indicated that the situation had now fully recovered, 16 per cent of all trustees and 15 per cent of all employers reported that the impact was still ongoing.

More broadly, the research also highlighted some areas where knowledge may be lacking.

For instance, although 86 per cent of trustees to medium and large scheme were aware of pensions dashboards, only 68 per cent were aware of the change in pensions law requiring them to provide data to savers through the dashboards.

Fewer (41 per cent) had heard of the Pensions Dashboards Programme (PDP) team established by the Money and Pensions Service to develop the technological infrastructure behind the dashboards, while only 9 per cent had visited the PDP website.

It also found that most schemes had not yet taken action to prepare for the dashboards, although some were planning to do so within the next six months, with the most common priorities being updating data, talking to the scheme administrator, and having discussions at a pension board level.

In addition to this, despite nearly nine in ten trustees (86 per cent) being aware of TPR’s new criminal powers made by the Pension Schemes Act 2021, just over half (53 per cent) were aware of the new employer insolvency and employer resources tests for contribution notices.

Many respondents, 40 per cent of trustees and 39 per cent of employers, were also unsure whether or not TPR was supportive of superfunds and consolidation.

Despite this, the report found that around a fifth of trustees (18 per cent) and employers (21 per cent) felt that consolidation was an attractive option for their scheme, with micro/small and medium schemes more attracted to consolidation than large ones.

Among those schemes interested in consolidation the most attractive model was master trusts, cited by 58 per cent of trustees and 67 per cent of employers, followed by superfunds, and other emerging models for de-risking and journey planning.

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