The pensions industry continues to be deeply divided over who should benefit from defined benefit (DB) pension scheme surpluses, research from LCP has found.

In a poll conducted by LCP during a webinar on DB funding, the consultancy discovered that 37.5 per cent of the 200 participants in the online meeting felt that scheme sponsors should benefit the most from any surpluses created by DB funds.

Nearly a third (30.5 per cent) said that DB members should gain from extra cash, through mechanisms such as discretionary benefit increases, for example.

Meanwhile, 29.7 per cent voted for a company's defined contribution (DC) cohort to benefit from released surpluses, although LCP pointed out that this least favoured option is known to be a major priority for Pensions Minister, Laura Trott.

Commenting on the findings, LCP partner David Fairs said that it was clear from the results of the poll that DB surpluses, if large and stable enough, could be shared across sponsoring companies and their employees alike.

“There is clearly an appetite for those surpluses to do good across both the sponsoring employers and existing DB members, but also to enhance provision for future generations of retirees," added Fairs.

"We hope that the government will see the potential for reform and look forward to hearing their conclusions in November’s Autumn Statement”.

The webinar, which was hosted by Fairs, also featured contributions from Work and Pensions Committee Chair, Sir Stephen Timms, LCP’s Sir Steve Webb and Laasya Shekaran.

During it, participants discussed the different ways in which the Pension Protection Fund (PPF) could be used to support more productive and higher return investments by DB pension schemes.

There was also discussion of the Tony Blair Institute's proposal for much larger scale consultation into the PPF and other large-scale consolidators, eventually involving everything from the Local government Pension Schemes to NEST.

Timms explained that the committee is concerned about whether DB funding rules do enough to allow those DB scheme that are still open to continue to invest for growth.

He also raised the issue of potential of systemic risks arising if large sums were transferred from DB pension schemes to the buyout market and then invested in a relatively narrow range of assets, following the precedent set by the liability-driven investment (LDI) crisis last September.

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