UK - NAPF CONFERENCE - Companies could be forced into insolvency if the new pension regulator's teeth are too sharp, a leading scheme manager warned.
PowerGen UK plc ESPS pensions manager Steve Mingle said the regulator must not act like a “deranged rottweiler” and force the unintended consequence where firms continue contributing to schemes to the brink of insolvency. He said a balance must be struck between teeth too blunt and too sharp.
He also said the Pensions Protection Fund board must similarly be sensitive to the moral hazard of unscrupulous employers dumping schemes on the PPF and ensuring struggling businesses are not crippled by being overlooked.
And Unison head of pensions Glynn Jenkins said that the long-term viability of defined benefit schemes rests on the success of the government’s new framework.
The four key measures, he said, were preventing solvent employers from walking away from pension schemes, the new funding standard, a more powerful regulator and the Pensions Protection Fund.
Mingle also argued a move towards genuine risk-sharing scheme designs is necessary where executives and the workforce are equally exposed.He said: “It is morally indefensible for executives to keep their final salary scheme open while the rest of the staff – who are less equipped to take on the risk exposure – are pushed into a low contributing DC scheme.”
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
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