Options include making surplus extraction easier and
designing a public sector consolidator
The DWP
today set out plans to ensure the £1.4 trillion held by pension
schemes delivers for savers and the economy.
Plans include making surplus extraction easier for well-funded
Defined Benefit (DB)
schemes, alongside a public sector consolidator operated by the
Pension Protection Fund.
The consultation – which runs from today (Friday 23 February)
until Friday 19 April – seeks views on how the money held in
DB schemes can be best
unlocked in the interest of savers and for sustainable investment
in the wider economy.
Minister for Pensions, said:
We are in a welcome position with DB pension schemes enjoying high levels
of funding, and we want to make this money work harder for savers
and the wider economy. I welcome industry views on our plans to
reform the pensions market.
Over the last decade most DB
schemes have become better funded, with the average scheme having
a funding level of 113% in 2022, compared to 104% in 2010. This
has led to an aggregate surplus of £200 billion.
By supporting these schemes to invest surplus in UK productive
finance assets, it is believed the schemes can help boost the
UK’s leading position as a leading financial centre, creating
wealth to help fund public services.
Additionally, with around 5,000 schemes operating in the UK,
consolidation of the market could also further the productive
finance agenda – providing greater opportunity to strengthen the
economy through increased investment.
Consolidation could also continue to strengthen security for
savers through economies of scale and improved governance –
ensuring better outcomes for savers remain at the heart of the
proposals.
Further Information
