Pensions - Articles - DWPs consultation on superfund vehicles welcomed by Aon


Aon, the leading global professional services firm providing a broad range of risk, retirement and health solutions, has welcomed the DWP’s consultation “Consolidation of Defined Benefit Pensions Schemes”, which aims to seek views on a new legislative framework for authorizing and regulating DB “superfund” vehicles.

 The results of the DWP will allow to set out proposals for how a future legislative framework for authorising and regulating superfunds might work. Consolidation already happens across the pensions market in different ways, however, how schemes choose existing consolidation options will depend on their own specific circumstances.

 Encouraging a well-regulated superfund sector may offer a more effective way of managing liabilities for some schemes.

 Matthew Arends, Head of UK Retirement Policy, said: “The DWP’s consultation brings much-needed clarity on the direction of travel the DWP anticipates for these new consolidation vehicles. Having said that, in a number of key areas, the DWP put forward several options for the future, which means there remains considerable uncertainty over the regime consolidators will operate under. This in turn will make transactions difficult in the short term.”

 Rhian Littlewood, Senior Consultant, said: “Interestingly, for the first time, the consultation brings the prospect of The Pensions Regulator regulating the sponsoring company as well as the pension scheme itself. Additionally, aspects of the regime for consolidators are much closer to that for insurance companies than for other occupational pension schemes. This adds up to TPR taking on a much more involved supervisory role in future.”

 Arends concluded: “One aspect that we had expected to see in the consultation but isn’t there is the accurate communication of the consolidator proposition to potential transferring trustees and companies; it is crucial the risks and costs are transparently and accurately portrayed so that there is confidence in these vehicles.

 “Related to this, there are no additional requirements to communicate with members prior to consolidator entry, other than the normal requirements for bulk transfers. Recognising that members will transfer without consent into the consolidator and that pensioner members will not be able to transfer out subsequently, we believe that additional member communications prior to entry that give more information about the consolidator vehicle will be essential.”

Back to Index


Similar News to this Story

Zombie firms with DB Pension Schemes may have no way out
Further analysis from KPMG UK finds that a fifth of so-called ‘zombie firms’ have defined benefit pension (DB) schemes which could put pension trustee
Pensioners urged to check availability for benefits
Annual research by HUB Financial Solutions reveals that losing the £154.50 licence fee from next June could be the tip of the iceberg for many thousan
Aegon highlight demand for DB advice remains strong
According to adviser research from Aegon the demand for Defined Benefit (DB) advice remains strong with 9 out of 10 (89%) advisers, who are or have be

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.