CANADA - Private pension assets should not be lumped with the Canada Pension Plan (CCP), as the temptation to use funds for political aims would be too great, according to Steve Bonnar, principal at Towers Perrin.
Some sections of Canadian industry have repeatedly proposed investing private sector pension funds in the CPP in a bid to reduce costs and have them managed more professionally.
Anne Swift, president of the Canadian Federation of Independent Business (CFIB), was the most recent industry player to make the call, as she claimed the gap between public and private pensions was widening.
But while Bonnar agreed the industry should facilitate a large pool of assets, he said the money should not all be invested in one place with the government.
“The temptation to use CPP investments for political ends would be too great if you drastically increased the amount of assets under the CPP’s control,” he said.
“I have concerns over the concentration of capital under the government and the private sector is a better place for that to be.”
Bonnar suggested economies of scale could be achieved by using a handful of private sector providers as general contractors, bringing together the necessary sub-contractors to provide an effective vehicle.
Enhanced powers for The Pensions Regulator (TPR) to prosecute and fine company directors who "wilfully or recklessly" put their defined benefit (DB) pension scheme at risk will be hard to enforce, commentators say.
Melrose has pledged to contribute up to £1bn to GKN's pension schemes as part of a final offer to acquire the engineering business.
Existing master trusts will be forced to pay £41,000 when applying for authorisation under the upcoming regime, the government has confirmed.
UPDATE 2 - DWP publishes DB white paper: Stronger powers for TPR, DB chair statements to be introduced
The Pensions Regulator (TPR) will be given the power to fine company bosses who deliberately puts their defined benefit (DB) schemes at risk, the government has confirmed.