The number of people leaving pension schemes has reached its lowest level this year, falling by a third in Q3 compared to Q2, while member enquiries about the current value of their pensions reached its highest level for the year, according to Aon Consulting, the leading employee benefits and risk management firm.
Analysis uncovers that pension scheme members are significantly more engaged in, and positive about, their private sector occupational pension schemes.
The Aon Pensions Admin Tracker analyses a sample of nearly 350,000 scheme members from 35 typical UK defined contribution (DC) and defined benefit (DB) schemes to provide an insight into how the economic environment is impacting behaviour towards pensions.
Q3 Aon Pensions Admin Tracker key findings
- Pension scheme members enquiries about the current value of their pension fund (transfer out quotations) reached their highest level this year, up 26% on Q2;
- The number of pension scheme leavers reached its lowest level this year, falling 34% in Q3 compared to Q2;
- The number of retirement settlements processed also fell to a new low for 2009, falling 31% in Q3 compared to Q2
Commenting on the data, Colin Hamilton, commercial director at Aon Consulting, said: “As with predictions for the economic recovery, the shape of member confidence levels in pensions is hard to call but, certainly compared to a year ago or even last quarter, people seem to be much more engaged about their pensions than they were.
“Greater awareness may well be due to the economic environment, but it may also come down to the fact that messages about the importance of saving for retirement are getting through to members more effectively.
“The substantial rise in enquiries around current fund values, coupled with a fall in the number of leavers, suggests that not only are members more interested and engaged, but also that there is increased confidence in the value of trust based pension schemes* with people being more reluctant to leave them.
“Interestingly, the announced rise in the minimum retirement age from 50 to 55 in April 2010 has not yet led to an increase in retirement activity. However, this could well be due to the time it has taken for schemes to fully communicate this change to members. We expect to see an increase in early retirement projections, followed by an increase in settlements, in the first half of 2010.”
