UK/EU - New EU legislation will give defined benefit members the right to know what they would get if their scheme wound-up, Mercer claims.
The new EU Pensions Directive requires all member states to review their pension legislation. Mercer Human Resource Consulting says the most significant for the UK is the interpretation of information on security of benefits.
Pension scheme members will have the right to receive information on the current financing level of their accrued individual entitlements.
It is likely that the statement of benefit security will be interpreted on the basis of a scheme being wound-up.
Mercer European Partner Mark Sullivan said: “At issue here is the mismatch between pension scheme promises and funding levels on a wind-up basis.
“Companies will need to invest in educating their members to help them interpret the figures and appreciate the risks.”
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