UK - New regulations which aim to give pension scheme members increased protection against wind-ups could have the reverse effect, a consultant claims.
HighamNobbs points out that while changes to the MFR should protect pensioners when a scheme winds-up – the weakening of the MFR could mean that transfer values could fall by up to 8%.
The pensions consultancy noted that lower transfer values for non-pensioners would more than offset the tougher rules for pensioners.
HighamNobbs partner Russell Agius said: “In isolation, incorporating the actual costs of purchasing pensioner liabilities – rather than MFR values – will serve to increase any debt on the employer.
“However when coupled with the treatment of non-pensioners under the changes to the MFR I would expect the effect to be reversed – that is, lower debt on the employer figures coming through.”
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