The National Association of Pension Funds has commented on the Department for Work and Pensions (DWP) written ministerial statement (WMS) on work place pensions and the Government’s decision on the consultation on a statutory override for Protected Persons Regulations.
Joanne Segars, Chief Executive, NAPF, said:
“The NAPF is disappointed by the Minister’s decision to maintain the protected person status for individuals employed in some formerly nationalise industries. The reality is that this will affect far more than the 60,000 protected persons in defined benefit (DB) schemes suggested by the DWP. The Government has effectively left it to pension schemes, trustees and unions to negotiate how this will be resolved - as employers operating DB schemes with protected persons face the dilemma of whether or not they can, or should, treat their scheme members inequitably.
“Our hope is that this will be resolved quickly and fairly. However, these protected persons belong to the largest occupational pension schemes in the country and if these negotiations are not successful, then the cost of implementing the changes will be felt by other scheme members or even the consumer.
“The NAPF has strongly welcomed the single tier State Pension system, but we believe that the Government must face the fact that this decision could present a serious blow to the viability of defined benefit schemes. One of our members whose scheme will be affected has told us this will cost them millions of pounds per year. The Treasury itself acknowledges the cost to the private sector will be in the region of £1 billion per year.”
“Having now made this decision, it’s imperative that the Government urgently presents a full set of draft regulations on the statutory override as the timescale for employers and schemes to make the necessary changes is extremely tight.”
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