Paul Maynard, pensions minister, says the Government had “always intended” for Open DB plans to have “flexibility” and was “aware that this may not have been clear in the draft Regulations that were consulted on”.
— Josephine Cumbo (@JosephineCumbo) January 18, 2024
Thanks to Jo Cumbo for the intelligence.
A clear intent
If the Government’s intention is to incentivise DB schemes to offer more pensions, this is the way to go about it.
It seems the Government are at last recognising what Baronesses Altmann and Bowles were telling them during the passing of the Pension Schemes Act 2021, namely that open schemes need to be given different treatment.
The different treatment will allow them to invest more in productive capital and less in non-productive and inappropriate liability matching assets.
Open schemes do not need to de-risk in the way that closed schemes do as is made clear by this excellent chart , produced by Derek Benstead. This should be printed and distributed to all case officers at TPR!
There will be a good deal of celebration over the next few weeks, if the DB funding code is published with this intent.
