The Pensions and Lifetime Savings Association has responded to the on the options for helping the scheme, steel workers and affected localities as a part of a wider package of Government support for UK Steel.
The PLSA’s response is built on certain outcomes it believes the consultation should achieve, these are:
BSPS secures a sustainable solution for its members which is supported by the scheme’s trustees;
any solution implemented is not detrimental to the sustainability of DB provision more broadly; and
Government commits to working with the PLSA’s DB Taskforce2, and the wider industry, to assess the challenges that DB schemes face when operating in the current DB environment and to develop solutions for addressing them.
The PLSA believes there is a strong regulatory system in place and the Pension Protection Fund (PPF) offers good outcomes for pension scheme members when their scheme sponsor is unable to meet its obligations to the scheme in full.
Accepting that the Government’s aim is to find a solution that minimises the risks to the UK steel industry and its workers we believe that, should a legislative option ultimately be required then, on balance, the Government should proceed with a modified version of option three set out in its consultation paper. This would include prospective amendments to the scheme’s benefits, via Section 67, as endorsed by the BSPS Trustees, so long as additional safeguards are put in place.
The additional safeguards the PLSA would like to see put in place are that:
the Government ensures legislative changes are scheme specific to the BSPS;
the Government ensures that the PPF and the Pensions Regulator agree whether the scheme is eligible for PPF protection and what legal entity will continue to support the scheme, ensuring that all necessary securities are put in place; and
the Government commits to a broader review of the legislative and wider challenges facing DB schemes.
This modified version of option three should enable the scheme to continue to provide good benefits for its members on a self-sufficient basis.
If these additional safeguards cannot be put in place, then the Government should proceed with option one, utilising the existing regulatory framework which will still provide good member outcomes.
Senior Policy Adviser