Pensions return to boardroom as stronger funding shifts corporate priorities – IGG

Pensions are demanding more boardroom attention as stronger funding positions and changing regulation give businesses more strategic options, according to research from Independent Governance Group (IGG).

The report found that 81% of CEOs, CFOs and senior pension decision-makers said the amount of C-suite and board-level time devoted to pensions had increased over the past five years, with 37% reporting a significant increase.

Despite improved funding levels, just 5% of CFOs said they were spending less time on defined benefit (DB) pension schemes.

IGG said the UK’s aggregate DB scheme surplus now stood at £210bn on a low dependency basis, prompting many organisations to consider how surplus could be used and the long-term value schemes could deliver.

The research found that 40% of respondents viewed their pension scheme as a source of future value if it remained fully funded, compared with 22% who primarily saw it as a financial risk to remove.

Meanwhile, 43% described their scheme as an important way of rewarding current and former employees.

However, the report also highlighted growing uncertainty around pension decision-making.

Almost two-thirds (62%) of senior decision-makers said pension responsibilities created pressure or concern within their role.