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Opas calls for rethink on MFR

The Pensions Advisory Service is calling for the replacement of the minimum funding requirement, arguing that it fails to cover members&#39 liabilities and equal protection to members when schemes are wound up.

Speaking at the Pensions in Crisis conference in London this week, Opas chief executive Malcolm McLean said the increasing number of closures of funds that satisfy the MFR is leaving many members short-changed at wind-up although a tighter regime would cost far more to provide.

He told the conference that the rules for the priority on wind-up favour those already retired ahead of those still working.

The Pickering report has proposed increasing the priority ranking of those approaching retirement.

McLean said: “We are unearthing case after case of people who are missing out on their entitlement when schemes are wound up.

“We had a case of a man who had worked for 38 years and his company went bust six months before retirement and he received a fraction of what he expected.

“The Government has got to do something if they really want people to continue to see final-salary schemes as a Rolls-Royce option and not a Reliant Robin option.”

Informed Choice director Nick Bamford says: “The more you up the test, the less employers will be able to stay in final-salary schemes.”

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