103 pages (106 in pdf format) and c50,000 words represent the Government’s latest take on DB pensions in the private sector. In 177 words, here are 4 things about it that make me want to say Grr.
Grr 1 – Nobody can sensibly disagree with wanting a system that is sustainable, affordable and protects members but this seems further away than ever despite the legislation and regulation to date. It is difficult not to be cynical and say this is because of the legislation and regulation and more Government intervention is unlikely to help.
Grr 2 – Allowing ‘underfunded’ schemes to suspend or lower indexation could have the effect of inadvertently rewarding schemes who adopt a riskier funding/investment strategy. It is naïve to think this will not put trustee boards and sponsoring employers on a direct collision course.
Grr 3 – Sustainable and affordable are not words that relate to DB schemes. If this is what is wanted there is one form of pension that will deliver it and is called DC.
Grr 4 – I wish the Government would stop side stepping the same issues with public sector schemes as the financial challenges facing UK plc are very scary. This is a pet subject of mine and one I will no doubt return to in future blogs.