Anyone in a DB pension scheme has a dependency on their employer to sponsor their scheme. It’s the dependency a child has on their parents who are needed to nurture them to maturity. But some parents have to or choose to walk away.
Such children need a foster parent. The idea is that pension consolidators offer to step in and foster pensions where there is inadequate parenting going on.
This is different from a pension scheme being bought out by an insurance company, where the scheme winds up , with consolidation , the scheme survives – but with a new parent.
In the past, the PPF have only taken on this role, when pension schemes have no parent and are unable to be bought out. But now the proposal is that the PPF take on healthy schemes from employers who want to walk away.
There are two questions here;
- Are PPF competent?
- Should the PPF be allowed to compete?
I’m keen that we discuss the suitability of various corporate actors who’ve put themselves forward to do this fostering.
I declare an interest, I work for one such myself.
The PPF want to foster – but many see them as unsuitable.
This blog has published the views of the Pension Protection Fund on their capacity to become a DB consolidator – as proposed by the Tony Blair Institute and discussed in the DWP’s recent consultation on DB options.
The PPF’s avowed intent to put itself forward, not just as a lifeboat , but as an alternative sponsor to employers with solvent schemes which are commercially unviable has attracted some sharp comment.
Rather than ducking the criticism, Shalin Bhagwan and David Taylor, senior members of the PPF, have agreed to spend an hour with the Pension PlayPen community on Tuesday 3rd October at 10.30 am. I will be making introductions and moderating questions, of which I expect there to be many,