Former pensions minister Baroness Ros Altmann says a PLSA call for smaller DB pension schemes to be merged into ‘superfunds’ to cut costs and improve returns is a “win-win” for employers and the schemes.

Her support follows a report from the PLSA suggesting that 3m pension scheme members have no more than 50/50 chance of getting their pensions because so many schemes have huge deficits and are unstable as a result.

She believes that so-called ‘superfunds' could ease pension pressures before more employers become insolvent and believes that as Brexit economic and political uncertainty worsens, final salary pensions are more at risk than they were.

She said: “Such a reform would be a win-win for employers (who can get rid of pension risk more affordably), for members (who would have more chance of getting full pensions) and for the economy (as more money could invest in public or higher return projects) and for younger generations (if employers have more resources to devote to their pensions, rather than buying out members of closed schemes).”

Britain's Defined Benefit (DB) final-salary type pension schemes are under unprecedented pressure, says the PLSA, with members having no more than a 50% chance of receiving the pension they expect.

Baroness Altmann says that so far, the Government has been “rather complacent” about the risks, but with the ongoing ultra-low interest rate environment and rising economic and political uncertainty, new thinking is urgently needed.

The PLSA supports estimates that 3 million people have no more than a 50% chance of getting their promised benefits, while three quarters of sponsors are facing significant challenges in running their schemes.