UK - Consultants have criticised the government's Pension Protection Fund as another penalty on well-run firms.
The Society of Pensions Consultants says the PPF will penalise companies which have kept their promises – while allowing the careless ones to contribute nothing.
It also believes the proposals will cause problems in the investment markets and could exacerbate the downward spiral of investment returns.
SPC president Donald Duval said: “We’re worried this levy will place an unfair burden on firms which provide good pension schemes, while allowing the ones which don’t contribute anything to get off scot-free.”
The Association of Consulting Actuaries agreed and said the net impact of the government proposals could be to increase the move away from DB arrangements.
ACA chairman Gordon Pollock added: “We are concerned at the proposed increased burden to employers on wind-up and fear this could result in some firms closing their schemes to future accruals.”
But the NAPF supported the government’s move to boost “fragile” public confidence in the occupational pensions system and felt it would strengthen the security of scheme members.
NAPF chief executive Christine Farnish commented: “In order to build on this positive step, we now need to address the issue of incentives to employers that already provide workplace pensions, and encouragement to those employers that are considering setting up schemes to do so.”
The Association of British Insurers recommended that the government introduce a package of employer-focused tax incentives to make it easier for employers to contribute to employee pension schemes.
The body also questioned if confidence in pensions could be restored without more incentives to save.
ABI director general Mary Francis said: “We believe public funds will have to be committed in one way or another if a pensions crisis is to be avoided.”
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
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