Consolidation of defined benefit pension schemes: consultation response by the PLSA
The Department for Work and Pensions’ (DWP) ‘Consolidation of defined benefit pensions schemes’ consultation sought views on a number of measures to support the setting up of defined benefit (DB) superfunds.
We are pleased that the consultation builds on the work of the PLSA DB Taskforce and the White Paper, as we believe that within a robust regulatory regime, superfunds can provide an important new option for underfunded schemes that does not currently exist. Superfunds are an opportunity to help ensure that more members have a better chance of receiving their full benefits.
The PLSA’s response is supportive of the majority of the proposals outlined, including strong superfund governance and those around mandatory fit and proper persons requirements. However, the PLSA do not believe that superfunds should be subject to Solvency II-style requirements due to fundamental differences in financial operations between superfunds and insurance.