UK Chancellor Jeremy Hunt said the government will launch a call for evidence today (June 11 ) on the role of the Pension Protection Fund (PPF) and the part DB schemes play in productive investment, “whilst always being mindful of the second golden rule to protect the sound functioning and effectiveness of the gilt market”
His first Mansion House speech dealt largely with proposals for reforming pensions (both DB and Defined Contributions -DC )and how pension funds can be better used to boost investment in the UK economy and produce a better outcome for savers.
Hunt noted there are over 5,000 DB schemes, which operate under under a different regulatory regime (from DC schemes)and their landscape is also too fragmented.
“I recognise the important role played by insurers offering buy-out schemes, which will continue to be an essential part of the way we improve security for pension members in this market.”
“But in addition, we will set out our plans on introducing a permanent superfund regulatory regime to provide sponsoring employers and trustees with a new scaled-up way of managing DB liabilities.”
“Having engaged closely with a range of experts, we will launch a call for evidence tomorrow on the role of the PPF and the part DB schemes play in productive investment – whilst always being mindful of the second golden rule to protect the sound functioning and effectiveness of the gilt market,” he added’
“We will look at the culture of investment decisions and improve the understanding of pension trustees’ fiduciary duty across both DB and DC schemes,” the Department of Work and Pensions and the Treasury ” will jointly launch a call for evidence to explore how we can overcome barriers and ensure a focus on good saver outcomes.”
Industry sources generally welcomed the outlined proposals and the planned consultation but are also wary of a rushed approach.