View more on these topics

LibDems fear DB schemes could sink PPF

The Liberal Democrats have warned that the Pension Protection Fund will have serious funding issues if the recession worsens after it emerged that 91 per cent of all defined-benefit pension schemes are in deficit.

Liberal Democrat Shadow Work and Pensions Secretary Steve Webb says the PPF could be “overwhelmed” by taking on more bankrupt schemes and may have to raise the levy for the remaining DB schemes.

According to the PPF 7800 index, the number of schemes in deficit in February stood at 7,017 compared with 6,924 schemes in January. The aggregate funding position (total assets minus total liabilities) of almost 7,800 DB funds is estimated to have worsened over the month to a deficit of £218.7bn at the end of February from a deficit of £190.6bn at the end of January.

Webb says: “The PPF risks being overwhelmed by bankrupt schemes and may have to raise the levy on the remaining open schemes. The PPF already has a deficit of £500m. If the recession forces many more schemes to close, ministers will have to explain how the pension lifeboat will be kept afloat.”

Recommended

We need a regulator of the regulator

I read with incredulity that the Association of British Insurers is warning against major regulatory changes. Do these people live on the same planet as the rest of us? How can the ABI possibly consider the FSA is not in need of major structural changes?

The Tory truth

I think I may just have had my Tory moment. The aphorism goes that normal people start off their thinking on the idealist left wing but as we grow older and more cynical, so we all become Tories in the end. I never thought it would happen to me. But two months ago, this column called for the wholesale reform of the FSA and this month that was stated in a Tory report proposal.

Regulator hits back at Tories’ twin peaks plan

Conservative proposals to split the FSA into two separate bodies have been rejected by the regulator which insists that a “twin peaks” approach to regulation would not have avoided the economic crisis.

Guide

Guide: how to change your auto-enrolment support

As we approach the two-year milestone of auto-enrolment, employers have had the opportunity to truly assess the capabilities of their chosen support. They are also now realising that getting to the staging date was the easy part, and that support is required for almost every aspect of the day to day running of their scheme. With the three-year re-enrolment window coinciding for many with the total removal of commission and Active Member Discounts from pension-related products and services, as well as the introduction of the pension charge cap in April 2015, many employers will have no choice but to review their support options. But, what is involved in transitioning your auto-enrolment scheme away from your current support options? This guide from Johnson Fleming aims to outline some of these key areas and provide information and discussion points on what you need to consider.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment