The Pensions and Lifetime Savings Association (PLSA) has today welcomed the Department of Work and Pensions (DWP) consultation “”.
Joe Dabrowski, Head of Investment and Governance, PLSA, said:
“While at first glance, section 75 employer debt in non-association multi-employer defined benefit (DB) pension schemes might seem to be a minor technical point; this consultation is vital. This issue impacts on some of the UK’s largest DB schemes as well as being a particular concern for many charities participating in multi-employer schemes.
“Under the current regime, companies that do not wish to maintain active membership in the scheme (for example as they have chosen to stop offering defined benefits pensions) are forced to do so unless they are able to pay the Section 75 employer debt. While this may not be a problem for some organisations, for others this might mean being threatened by insolvency if they ceased active membership. The proposals could make the system more sustainable by allowing employers to better manage their risks – in the same way that employers participating in single employer schemes can.
“However, there is little question that in a non-associated multi-employer scheme a departing employer must cover its liabilities to the scheme. So we will need to look carefully at the details of the proposed changes to ensure that the right balance of member protection and employer flexibility is achieved. The strength of the ongoing relationship between employers and the scheme is essential to ensuring this.”
NOTES TO EDITORS:
We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.
Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.
Lee Blackwell, Head of Media and PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073023, E: [email protected]
Babak Mayamey, PR Manager, Pensions and Lifetime Savings Association
T: 020 7601 1718, M: 07825 171 446, E: [email protected]
Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007 713, E: [email protected]