Options for Defined Benefit Schemes

Options for Defined Benefit Schemes: PLSA’s response to DWP’s call for evidence

Following the Chancellor’s speech at Mansion House on 10 July 2023, in which he announced the Government’s intention to explore various ways to incentivise the UK pensions industry to invest more in productive assets, DWP released a call for evidence focusing on four key areas:

  1. How to incentivise DB schemes to invest more in ‘productive assets’;
  2. Whether DB surpluses can be used more productively – eg. to encourage trustees to take on greater investment risks, or to fund contributions for DC members;
  3. Whether the Government should establish a new public consolidator to operate alongside commercial consolidators; and
  4. Whether the role of the PPF should be expanded to act as that public consolidator.

The DB pension landscape has changed significantly over the last two years, so the time is right to examine whether pension assets are working as effectively as possible for members, schemes, sponsoring employers and the UK economy, without undermining the fiduciary duties of trustees and at the same time maintaining appropriate security over members’ benefits.

Based on feedback from our members, the PLSA’s submission provides responses to the consultation questions posed by DWP as part of this call for evidence.