Three quarters (75 per cent) of pension professionals have identified underpins and 'better of' tests as the most challenging or complex benefits to simplify, according to research from the Society of Pension Professionals (SPP).

The SPP said that with defined benefit (DB) schemes increasingly preparing for possible risk transfer projects, the benefit simplifications that might be necessary or desirable to facilitate a transaction are a key consideration.

The panel examined a range of benefit simplification issues, from those that are difficult or expensive to insure to streamlining options and specific considerations for large and small schemes. 

While underpins and 'better of' tests topped the list, the survey also found that 10 per cent of respondents identified complex pension increases as the most complex benefit to simplify.

Another 10 per cent said state pension integration, including bridging pensions, while 5 per cent highlighted in-service benefits as particularly complex.

Commenting on the findings, Gallagher Benefit Services senior consulting actuary and chair of the event, Alison Longman, said: “Using 'better of' tests to compare different pension benefit options, including the underpin, to decide which provides the best outcome for the scheme member can be a challenging and complex process.

“So, it was perhaps no surprise that SPP polling demonstrated that pension professionals overwhelmingly feel that underpins and the 'better of' tests are the most challenging aspect of benefit simplification – with three quarters of attendees stating this was the case.”

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