TPR mortality proposals ‘one step too far’ warns NAPF

In its response to The Pensions Regulator’s consultation on the plans, which closed last week, the trade body said using long cohort mortality projections as a trigger would put further strain on the viability of DB schemes.

It said the regulator’s mortality improvement trigger would push trustees to adopt the assumptions in all circumstances – even when it was not relevant to their scheme specific circumstances or when sufficient prudence had already been exercised.

NAPF director of policy Nigel Peaple said the regulator had been successful in raising the standards of governance, guidance and education for trustees, but that introducing such far-sighted assumptions was "one step too far".

"What is intended as guidance will end up being treated as a new minimum requirement.

"This issue matters as the wide scale adoption of this assumption – even where it is not appropriate – will increase liabilities and schemes cost, thereby undermining the future of high-value benefit pension provision," Peaple said.

The CBI agreed – noting longevity research by KPMG challenged the regulator’s blanket approach to target all schemes.

The report said a trigger set at long cohort plus a 1pc underpin was an unnecessarily "heavy-handed" way of dealing with firms that have already taken action, and would be detrimental to the health of the sponsoring employers.

CBI director-general Richard Lambert said: "Firms are already taking action to ensure employees’ pensions are protected as life spans improve. Imposing an overly prescriptive regime would undermine the regulator’s scheme-specific approach and needlessly raise costs for companies, weakening their ability to keep pension schemes open for future saving."