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Protection fund will see more schemes shut

All things considered, I think that the pension protection fund is unlikely to achieve anything at all but the closure of yet more final-salary pension schemes.

First, Ros Altmann says the sums that the fund is likely to accumulate are going to be totally inadequate for the purpose intended. Second, schemes are already fed up to the back teeth with levies and additional admin. Third, there must be a certain degree of resentment on the part of employers at having to cross-subsidise the consequences of other schemes failing. They have enough on their collective plate to keep their own schemes going.

Fourth, most of the problems now afflicting final-salary pension schemes are the result of persistent Government meddling and interference. With only a handful of exceptions, we never had any of these problems until the Government started sticking its oar in. It all started with the Conservative Government of the 1980s effectively requiring private sector employers to align the provisions of their schemes with those of the public sector, for which the private sector employers were already paying, as well as for their own schemes by way of National Insurance and taxation.

The trouble with all these measures, though, is that once they have become law, it is very difficult indeed to undo them, so the outlook for private sector final-salary schemes can hardly be very good, can it?

Introducing the PPF now is a bit like the FSA having decided at just about the worst possible time to stick the boot into with-profits funds.

Julian StevensWDS,



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