A significant proportion of pension schemes around Europe are finding it hard to keep up with new regulatory developments, research published by State Street this week has found.
One in three schemes surveyed on behalf of the investment advisors said it was either 'extremely difficult' or 'difficult' for them to keep up with regulatory changes. A further 46% found it 'slightly difficult' to keep on top of these developments, and only 21% said they had no difficulties.
Only one in five (21%) of those surveyed said demands from regulators and ratings agencies were not a challenge, while 31% said they were a 'significant challenge'.
Sven Kasper, who has responsibility for regulatory, industry and government affairs for State Street in Europe, Middle East and Africa, said: 'Since the financial crisis, there have been substantial changes in the pensions industry in terms of regulation, transparency and reporting, and this has coincided with very volatile markets.
'Our research findings show that pension funds are under more pressure than ever before as they struggle to keep up with the ever-changing landscape.'
Pension schemes also highlighted the key challenges they expect to face over the next five years, with 81% forecasting increased complexity in their investment decisions. Three-quarters of respondents expected persistent funding challenges to speed up the closure of defined benefit schemes and the move to defined contribution, while 69% expected national governments to take 'aggressive action' to close the retirement savings gap.
A similar percentage of schemes (76%) surveyed expect smaller funds to look to outsource all aspects of their fund management over the next five years as they seek to cope with these challenges.
The research, which was conducted for State Street by the Economist Intelligence Unit, involved 150 DC and DB schemes from Germany, Italy, the Netherlands, Switzerland, the UK and Scandinavia.