Interviewing for a corporate pension trust role I was asked for my thoughts and concerns over the medium term – I found myself using an expression often used during relationship break downs – its not us, its them.

Most UK corporate defined benefit pension schemes are now closed to new members and the trustee role is one of supporting a defined membership.  At present most schemes have the willing support of their employer – often because the company’s senior management team have a vested interest in seeing the scheme continue.

My concern is (hopefully) a few years out.  By this time the company management team have no personal links with the scheme and the majority of employee members are retired. If longevity is under-estimated and the scheme needs additional funds from the employer there is a real risk that the management team, particularly if they are under pressure, may favour investing in the current business and existing staff over paying yet more money to a group of former employees who are all retired and have already had a good deal.

While this may not happen to the respected institution I was meeting my concern is that  when it happens somewhere, there will be mounting pressure on all businesses from investors and other stake holders to do the same.

Written by John Small

John’s business career started in the technology sector working with ICL and Fujitsu before moving to International Finance where organisational change and development has been a constant theme.