The defined benefit (DB) market remains “highly fragmented”, with a large number of small schemes, according to the Pension Protection Fund (PPF) executive board member and general counsel, David Taylor.

In a session at the Pensions Age Autumn Conference,Taylor said: “Almost 4,000 (75 per cent) schemes have less than £100m in assets and of those, about a quarter have less than £5m in assets.”

“This must invite the question, can schemes of that size, design and implement the best possible investment strategy and can they give the best advice and support.”

Later in his speech, commenting on the wider DB market, he noted that the new government has not yet said where they are on DB consolidation, suggesting that “we are sort of in wait-and-see mode.”

However, he said: “There is a lot of great stuff happening with superfunds, [including] the new regulatory framework for that.

“Insurers are innovating as well with more tools coming to the market for small schemes, however, we think there is more to do, as so far Clara is the only commercial superfund that is taking business."

He also pointed out that although last year was a “record” year of risk transfers, there were only about 162 deals from 4,000 schemes with less than £100m in assets.

Following the election in July, the Labour government included a Pensions Schemes Bill in the King's Speech just one week after the election and launched a pensions review within the first month.

The Pensions Schemes Bill announced the government’s intentions regarding the DB market, including specific proposals for legislation on commercial superfunds, but there was no mention of plans for the PPF to act as public consolidator.

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