The National Association of Pension Funds (NAPF) commented on the announcement in the Autumn Statement that the DWP will consult on whether to allow companies to smooth asset and liability values, and also consult on providing The Pensions Regulator with a new statutory objective.
Darren Philp, NAPF Director of Policy, said:
“Businesses are struggling with gaping deficits in their final salary pension funds, and quantitative easing (QE) has made things much worse. Firms are being forced to divert cash away from jobs and investment into filling holes in their pension funds. We think QE has distorted the picture and that the deficits can be misleading.
“We have been calling on the Government to help pension funds deal with the damaging effects of QE for a long time, and we are pleased that it has listened. It is good to see the Chancellor explicitly recognising the problem.
“We will work closely with the Government and the Regulator to help find a solution to the volatility in funding deficits that companies are currently experiencing.
“But time is of the essence. It is important that any change is implemented quickly, and helps companies currently going through their funding valuations. These firms are the most affected by the current low gilt yields, and any support should be extended to them too.”
On the addition of a new statutory objective for The Pensions Regulator, Mr Philp added:
“A new statutory objective for the Regulator could ultimately deliver a more proportionate regulatory regime that recognises wider economic factors. We have long held concerns that the Regulator is more focused on keeping funds out of the Pension Protection Fund, without due regard to the pressures on companies and the impact on workplace pensions.”
Notes to editors:
1. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.
Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]
Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]