Defined benefit pension scheme Green Paper - PwC comments

Published at 12:00 PM on 20 February 2017

Commenting on today's Green Paper on defined benefit pension schemes, Raj Mody, PwC's global head of pensions said:
"Today's Green Paper gives some hope to many employers who have struggled with the rising cost of their defined benefit schemes and want to put them on a firm footing.

"For many schemes, pension increases far outstrip modern inflation measures, due in part to the lottery of how they were set up and layer upon layer of subsequent legislation.  Allowing these to be eased in cases of distress is sensible.  Our Skyval index showed that UK pension deficits were around £470bn at the start of February.  Depending on the extent of the easement allowed, this could be reduced significantly by the measures suggested.   

"Other suggestions in the Green Paper, such as improving the efficiency of regular funding valuations are also timely, particularly as the ability to use technology to manage pensions risk has evolved significantly since current legislation was written.  

"However, we should not overestimate what a Green Paper by itself is designed to achieve. It is mostly at this stage exploratory, and asks more questions than it provides answers or definitive conclusions. It will take some time for the ideas in the Green Paper to be developed into detailed proposals, agreed, and then come into law. But it is encouraging that the Government is willing to enter into a wide ranging debate on the issues."  
Media contact:
Katherine Howbrook, PwC media relations, Tel: 020 7212 2711/07595 609 737, Email: [email protected]


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