-
Member protection, funding and investment, scheme
affordability and consolidation will be reviewed as part of the
consultation
-
Government will consider strengthened powers for the
Pensions Regulator
-
The Green Paper will be a wide ranging call for
evidence from employers, the pensions industry and
consumers
A new consultation considering the security
and sustainability of Defined Benefit pension schemes has been
launched today.
Defined Benefit schemes, many of which are
also known as ‘final salary pensions’, are an important pillar of
the UK economy and our pensions system. Currently, around 11
million members in the UK will rely on a Defined Benefit scheme
for all or part of their retirement income and Defined Benefit
pensions hold around £1.5 trillion of assets.
Increased life expectancy, changes to
working patterns and the economy, mean that Defined Benefit
schemes are operating in very different circumstances from when
they first became popular.
The Government is committed to a system that
works for employers, schemes and the 11 million people who are in
a Defined Benefit scheme.
The Green Paper will consider the powers of
the Pensions Regulator and encourage a debate about striking the
right balance between the needs and aspirations of sponsoring
employers, members, the Pension Protection Fund, and the wider
economy to ensure that no one group is unfairly
disadvantaged.
Minister for Pensions, ,
said:
“People need to have confidence in their
pension and it is vital that they feel that they are secure. With
recent high profile cases highlighting the risks inherent in
Defined Benefit pensions, we want to ensure that these important
pension schemes remain sustainable for the future and that the
right protections are in place for members.
“Over the coming months we’ll be working
closely with the pensions industry, employers and scheme members
to see what more can be done to increase confidence in Defined
Benefit pensions.”
While there is no evidence of a systematic
issue, the Government recognises that recent high profile cases
have raised concerns regarding pensions and is looking to improve
confidence in the sector and hear from a wide range of experts,
employers and consumers about what action or support could be put
in place.
The Green Paper looks at a range of issues
that have been raised by various stakeholders. In particular it
focuses on four key areas so that we can start to build consensus
on whether we may want to reform the current system. They
are:
- funding and investment;
- scheme affordability;
- member protection; and
- consolidation.
