Protection must be guaranteed
UK - Government attempts to bolster confidence in the security of pensions will evaporate overnight unless it guarantees protection, a consultant warns.
Mellon Human Resources & Investor Solutions is also concerned that many people now “erroneously” believe that their pensions are fully protected by the various government schemes.
Head of technical services Kevin LeGrand said that while the Pensions Protection Fund had raised confidence among members, it needed government backing to meet public expectations.
He said: “Any confidence in the security of pensions that these schemes might build in the minds of members is in danger of evaporating overnight in the event of just one more major scheme failure which results in members suffering serious pensions losses.”
He added: “In this event the PPF would itself become insolvent, and therefore the government should be seen to stand behind the fund to ensure affected members will not have their benefits cut back.”
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