Increasing protection for pension scheme members
The Government plans to increase powers requiring employers to provide contributions to a pension scheme if their actions could threaten the security of members’ pensions. The changes would give the Pensions Regulator stronger powers to reduce the risk to members’ interests by scheme changes or corporate transactions.
Minister for Pensions Reform Mike O’Brien said: “The Pensions Regulator has done an excellent job in recent years but we need to ensure its powers keep pace with developments in the pensions market.”
The Minister added: “I am concerned that some emerging business models might not give the same protection for pension schemes as traditionally provided by a sponsoring employer. We need to ensure members’ interests are protected. I want to guard against pension schemes simply being treated as a commodity to be bought or sold. ”
According to the Minister, the most effective way to tackle this problem is to give the Regulator the power to require contributions to pension schemes when an employer’s actions reduce the security of members’ benefits. However, the powers would only be targeted at risky situations to avoid putting onerous burdens on employers.
A statement setting out the proposals has been published on the DWP website, which will be followed by a formal eight-week consultation period.
The full statement can be found at
http://www.dwp.gov.uk/pensionsreform/latest_news.asp
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