UK - The Government has moved to protect the PPF from private sector competition, by refusing to allow potential BrightonRock clients to escape the PPF levy.
However, minister for pension reform Mike O'Brien told MPs during a debate on the pension buyout market yesterday that now was not the right time to allow new providers such as BrightonRock to compete with the PPF.
Con Keating, analyst at BrightonRock, said it was a first meeting and he was not surprised by the government's response. He said BrightonRock's business model was still viable as a contingent asset.
He said: "What we are suggesting to them are a few enhancements which enable a much broader range of private sector insurance solutions.
"The business we are building is not dependant on those particular enhancements being in place - our business model works whether we get changes in legislation or not.
"But rather than being another contingent asset, we think there are massively superior things that can be done with relatively small tweaks to the legislation.
"What [the minister] said to us yesterday is he really doesn't want competition for the PPF at this point in time, but that doesn't mean we can't collaborate."
Speaking to MPs yesterday, O'Brien, who met BrightonRock on Monday, said he welcomed recent innovation that had flowered in the pensions industry such as greater competition, novel product development and some of the buy outs.
But he warned: "Innovation can be good, but not all innovation is good, and supporting innovation generally should not mean condoning proposals that could be harmful to pension members' interests.
"For example, in another area of pensions policy, I had to judge yesterday whether it was the right time to allow new providers such as BrightonRock to compete with the PPF by exempting schemes that have bought its products from paying PPF levies.
"I took the view strongly that this is not the right time to do that. For the moment, I believe that we need stability in the pensions market to strengthen confidence."
Keating said he still believed that in the long term there would be a move to private sector models.
He said: "This government is not any different to any other government - they do not want to be in the pensions insurance business. In the fullness of time, all of this is going to end up in the private sector.
"Pensions insurance is not a natural business for any government."
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