Majority of schemes want government to issue more index-linked gilts

The survey revealed 82% of schemes believed it would be ‘very' or ‘quite helpful' for the government to issue more long-dated and index-linked gilts.

NAPF chief executive Joanne Segars called on the chancellor to address this in his pre-Budget Report. She said the chancellor had a "golden opportunity that must not be missed" to make a difference by announcing that the government will issue more long-dated and index-linked gilts.

She said: "This single measure would benefit pension funds by helping to reduce deficits and support corporate scheme sponsors by reducing the scale of pension fund liabilities on their balance sheets.

"The government can no longer sit on its hands. It must take bold and positive action to help support employer-sponsored pensions.

However, this comes a week after the Bank of England told delegates at the PP Show 2009 it would like to see more uptake of index linked gilts by institutional investors - but said there wasn't much participation by schemes when the auctions came up as the bonds were often seen as too expensive (Global Pensions; November 19, 2009).

The NAPF survey also showed the number of private sector defined benefit schemes open to new members had fallen by five percentage points in one year from 28% a year ago to 23% this year.

It also revealed DB funds' allocation to equities had fallen seven percentage points from 51% last year to 44% this year, but allocation to fixed asset classes had increased by five points - to 38% on average.

Average contribution rates to DC schemes remained stable and now stand at 11.5%.

The survey further showed the risk of levelling down when employer duties come into force with 8% of schemes planning to reduce their contributions. However, a further 41% said they will maintain their scheme in its current form and auto-enrol their employees into it.

A quarter of respondents did not yet know how they will react to personal accounts.