UK - Closing defined benefit schemes to new employees does not resolve all of a firm's pension problems, delegates at a Lane, Clark & Peacock seminar declared.
The consultant said 80% of trustees, pension managers, finance directors and HR directors taking part realised closing a pension scheme to new members did not alleviate the financial burden on the employer.
But LCP partner Francis Fernandes added: “As soon as a DB pension scheme closes, the clock starts ticking to winding up the scheme and buying out benefits with an insurance company – perhaps not for many years – but the end-point of the scheme has appeared on the horizon.”
He also warned that the number of schemes closing to all members could increase following the government’s recent proposals which, he said, put more risk on employers.
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers