LCP Partner David Everett said:
“Today’s White Paper on protecting defined benefit pension schemes leaves much of the present regulatory framework intact, whilst only being able to set out in outline form what changes are intended – to be delivered within an uncertain timeframe.
“Whilst the headlines have already been taken over the weekend with the promise to punish those who deliberately put their DB schemes at risk, what is likely to be of most interest to trustees and their advisers are the measures designed to enforce DB scheme funding standards. And on this, although the direction of travel is clear, quite what the destination will look like remains to be seen. Nevertheless, if the funding regime can remain scheme-specific, whilst facilitating greater support when scheme sponsors are most able to provide this, the Regulator and Government will have gone some way to improving the security of DB schemes.
“In other areas, much remains a work in progress with a completely uncertain destination – in particular the idea of driving consolidation in the DB marketplace. And where there had been hopes of adjustments – such as on RPI-linked pension increases and benefit compromises for stressed schemes – disappointingly the status quo is to remain.”