UK - Companies could be forced to abandon their defined contribution schemes entirely should the Pensions Regulator go ahead with its plan to impose regulation on the industry, Aon Consulting has warned.
Pension Regulator CEO Tony Hobman yesterday called on the industry to tackle the risks inherent to DC schemes.
He highlighted poor administration, unduly high charges and a lack of member awareness as some of the key concerns.
Aon DC head Paul Macro said Hobman’s statements had done little to encourage employees to join DC schemes in the first place, and added:
“It looks like the regulator is going to press ahead with his imposition of regulations onto DC schemes. In too many cases this could have the effect of forcing companies to abandon pension provision completely, remember over regulation takes much of the blame for the demise of defined benefits.”
He concluded that best practice guidelines would be more preferable than excessive regulation.
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