UK – The Association of Consulting Actuaries says smaller UK pension schemes have increased their holding of bonds over equities.

“In the main, schemes have increased their holding of bonds at the expense of equities,” the ACA said in the ‘2004 Smaller Firms Pensions Survey: a Divided Nation’.

The survey, the ACA’s fourth, also found that 37% of defined benefit schemes have changed their overall asset allocation over the last two years. “It is perhaps surprising that not more have reported such a change,” the ACA said.

And it said it is “surprising” that only 22% of smaller pension funds have changed their fund managers in the last two years.

“At a time when investment performance is of particular importance it is also surprising that only just over on fifth of schemes have changed their fund manager(s) over the same period.”

The ACA found that under a third of scheme trustees had taken any positive action in response to the Myners Report.

It said: “In part this might reflect the different pressures on smaller schemes to change, but it might also reflect a reality that such schemes and their trustees do not have the same amount of time to consider such non-core issues. Others will feel they already comply with the principles.”

It added: “Over three-quarters of firms say the new ‘knowledge and understanding requirement’ placed on trustees will deter individuals from wishing to be trustees.”

Amongst other findings, 75% of defined benefit schemes have been recommended by their actuary to increase contributions because the scheme is in deficit – and that more than one third have raised employee contributions.

The ACA also found that support for the planned Pension Protection Fund has risen to eight out of 10 funds.

“Overall, the picture we see is of a ‘divided nation’ in pensions, with those fortunate enough to be covered by defined benefit schemes – an increasing number of public sector workers and those private sector firms able and willing to bear the costs and liabilities – enjoying greater certainty over their pension future,” said ACA chairman Gordon Pollock.

The survey was conducted between September 2003 and March 2004 and had 459 responses from firms with 250 staff or less.