TUC urges government to conduct review of pension buyout models

It said it backed government proposals giving the Pensions Regulator additional powers to help protect pension schemes from poorly funded buyouts or unscrupulous investors that put pensions at risk.

But it said there should be a full review of buyouts to ensure that the regulatory regime is fully up-to-date – and to ensure the rules kept up to date with any new business models.

TUC general secretary Brendan Barber said: "The buyouts market has grown at breakneck speed in the last 12 months. While insurance-based buyouts can provide greater security to members' schemes, the growth of increasingly complex and potentially risky new buy-out models could pose a serious threat to pension schemes. Without better regulation, it would only be a matter of time before we faced a scheme disaster.

"The additional powers granted to the Pensions Regulator are welcome. But new business models will emerge and a full review is needed so that pensions schemes are not put at risk by new asset-stripping business models that rely on avoiding regulation."