UK - Executives in final salary schemes with future pensions greater than £25,000 per annum are being urged to switch to money purchase plans.
Alexander Forbes Financial Services points out that the Pensions Protection Fund only offers safeguards on the first £25,000.
Defined benefit scheme members with pots higher than £25,000, therefore, would receive no protection from company insolvency through the PPF.Corporate development director Robert Macgregor said by transferring to an insured defined contribution scheme, up to 90 per cent of the fund would be protected.
He said: “They may be surprised to find that DC can give them a higher level of retirement income security and predictability than their company scheme.
“In the post-Enron world no-one can be confident that their employer is rock solid. The government’s new legislation to protect members when an employer goes bust offers very limited security to those who expect a substantial pension.”
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers