David Fairs and Dr Beeching
When the Pensions Regulator launched its DB funding consultation earlier in the year, I thought it a “slam dunk”. Back then it was already clear the world was in the grip of a pandemic and the paper presaged what was to come. I wrote – “why consult – lockdown!”
David Fairs – head of policy, advice (and unofficial head of PR) made it clear on this blog that this was a proper consultation and my insinuation that it wasn’t would be proved wrong. So I guess TPR will be reading this with a big fat “told you so” smile on their lips.
NEW: The Pensions Reglulator says it will not be launching the second phase of its consultation on changes to the DB Funding code until spring 2021 “at the earliest”. pic.twitter.com/uYkQ8oQh3V
— Josephine Cumbo (@JosephineCumbo) August 18, 2020
I guess the question is whether the Pensions Regulator, faced with a strong lobby from the consultants (see recent blog on the SPP), the Baronesses Bowles and Altmann and the noise on here of Keating and Clacher, are backing down.
Steve Webb, who knows which side of bread is buttered, is towing the party line.
Hi Matthew – not sure I read this as a significant delay. In the hope they were actually planning to read what we say in response to part 1 before drafting part 2, if they were publishing *before* Spring 2021 you’d wonder why they bothered consulting!
— Steve Webb (@stevewebb1) August 18, 2020
Clearly there are two schools of thought but the world of August 2020 is different from that on March 3rd when the consultation launched.
The intervening period has seen more than just the consultation responses. It has seen the notable airlifting in of Superfunds to “widen the spectrum of choice for employers with DB schemes ” – as the Pensions Minister would have it.
While not quite a “brave new dawn” for DB – the Government does seem to be opening new doors (and not just to CDC).
My guess is that far from slamming the door in DB’s face, COVID-19 has woken a few people up to the advantages of having open pension schemes and that the kind of Beeching hatchet job envisaged by the consultation’s one size fits all scheme closure regime may be a cut too far.
Addendum : Congratulations to David Fairs
https://t.co/UT9DOZ3SYR 72 and 73 of my 104 x10ks completed for @Sarcoma_UK #TeamSarcoma as part of my #TwoPointSixChallenge
— David Fairs (@david_fairs) August 5, 2020
On a personal note, this blog congratulates David Fairs on his personal fitness regime which has seen him raise money by slimming down.
Let’s hope that the Pensions Regulator follows suit!
Personally, I think that apart from LGPS all other funded DB pension schemes will close in the next 10 years.
In a low interest rate/ low equity return world, the costs of running DB pensions is well too high.
These schemes could only exist for entities that could be seen that will be around forever, and apart from Local Governments none have this attribute.
What is the evidence for “low equity return world?”
Since the creation of the Pension Protection Fund, there has been a back up plan to provide a minimum level of pension for members of schemes whose employers have ceased to be. If PPF protection is not good enough for you, then lets improve the PPF.
There are schemes with employers with a very reliable future. e.g. Universities Superannuation Scheme is an industry wide scheme, it is inconceivable that the university sector could cease to be. e.g. utility companies