UK - Despite the Pensions Bill empowering trustees to modify future accrual of benefits, trustees say that they will leave it to the new pensions regulator to decide on funding levels if they are unable to reach agreement with employers.
The Pinsents Pensions Survey found that over 60% of those surveyed thought that rather than exercise the new statutory power to modify future accrual of benefits, trustees would leave the new Pensions Regulator to decide on funding levels if they were unable to agree with employers. Christopher Berkeley, a partner in the Pensions Group at Pinsents, said: It is still unclear what the new specific funding requirement will mean for pension schemes, although the funding test is likely to be tougher than the current Minimum Funding Requirement and funding levels will need to be agreed with employers.
“Although trustees will be given a power to modify the future accrual of benefits under schemes if they are unable to agree funding with employers, our survey suggests that trustees are more likely to take a cautious approach. This indicates that trustees would leave the funding level to the new Pensions Regulator rather than exercise that new power.
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