Broadstone believes that new tPR statutory objective could damage security of benefits for DB pension scheme members

JBS 2

Talk to John:

john.broomesaunders@broadstone.co.uk

020 7893 3441

Today the Chancellor of the Exchequer announced that the Pensions Regulator would be given a new statutory objective. The Regulator will be required to ensure “funding arrangements that are compatible with sustainable growth for the sponsoring employer.”

John Broome Saunders, Actuarial Director at BROADSTONE, believes that this will lead to lower overall deficit funding rates. “This marks a clear shift in the balance of power. The majority of DB scheme sponsors will want to argue that sustainable growth requires greater investment in their business, and thus lower contributions to fund pension deficits. Larger deficits mean less security for members, and a heightened chance that schemes end up cutting benefits and being dumped in the PPF.”

John Broome Saunders, Actuarial Director commented that "Individuals in receipt of a pension should take their share of the burden that pensions have on the economy. The long-term savings that could have assisted UK Plc that a reduction to RPI would have introduced, along with the switch to CPI already implemented would have gone some way to ensuring that companies are better able to invest in their business rather than their pension scheme. This decision is, therefore, bad news for those in work and looking for work in the UK."

John Broome Saunders

Actuarial Director