UK - Public sector workers in the UK strongly oppose pension reform, according to Hymans Robertson.

In a recent report, the consultancy found that only one in 10 workers said they would accept pensions reform, while more than one-third of workers believe reform will not work.

John Wright, head of public sector pensions, said much of this resistance stemmed from workers misunderstanding how pensions would affect them.

He said 10% of these workers erroneously believed they would lose their accrued fund savings after pension reform, and that less than 20% could see the value in career-average pensions.

However, more than half of workers (52%) concede that the current pension system is unsustainable, he said.

The solution is to maintain "good communication with scheme members" to address misconceptions and win their support.

"Without [their support], there is a real risk pension reform will fail," Wright said.

In other news, MetLife Assurance's UK Pension Risk Behaviour Index (PRBI) has shown that 'employer covenant' is the second most important risk facing defined benefit pensions.

The PRBI surveyed 89 sponsors and trustees for their views on various risks facing pension schemes.

The employer covenant risk refers to the risk of an employer becoming unwilling or unable to fund a pension scheme.

Although it also ranked as the second greatest risk in 2010, this year, 49% of sponsors and trustees rated it as 'important', a 28% increase against last year.

Dan DeKeizer, chief executive at MetLife, said trustees needed to be especially careful of employer covenant risk in times of economic volatility.

Emma Watkins, director of business development, said employer covenant needed to be watched during M&A activity, where the acquiring company must account for the other company's pension scheme liabilities.

Finally, the government will propose legislation later this year to smooth out regulatory differences for short service refunds, small pension pots and transfers, according to the Department for Work and Pensions (DWP).

A short service refund is a refund of pension contributions for employers who leave a job after less than two years of work.

For people who change jobs frequently, the default procedure of receiving a refund discourages them from saving money.

Minister for Pensions Steve Webb said there were just over half of working people changing jobs within two years and that a significant percentage of the population was affected by these refunds.

The DWP will propose legislation to change this procedure. In addition, the current Pension Bill that implements automatic enrolment will affect small pension pots and transfers.

Webb said a full set of proposals covering small pension pots, transfers and short service refunds would come in the autumn.

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