UK - Employers looking to close their final salary pensions provision must analyse the contribution rules of the scheme, warns Wragge & Co.
Head of pensions Glyn Ryland said that scheme sponsors could find themselves liable for compensation if they do not understand these rules, which set out the obligation of the employer to the trustees.
He explained: “In modern final salary schemes, most contribution rules give most of the power to the employer, subject to the Pensions Act.
“But, older schemes often contain an employer contribution rules which gives some or all of the power to the trustees or the actuary.”
A number of pension schemes have been prompted to lock in gains with a move into bonds after the estimated deficit across FTSE 100 DB pension schemes improved by £36bn, over the 12 months ending 30 June last year, JLT Employment Benefits found.
HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
AMP Capital has set up a dedicated team to help institutional investors, including pension funds, invest in infrastructure through direct equity allocations.