I have been commending the PPF for what it has done over the past 20 years but there is a question hanging over both it and its sister organisation the FAS. It is well put by “dutifully gentleman” who is known to me and may be known to you for the simple style of address. I know of no more persistent advocate of those who did not get the benefit of PPF.
But Pension Oldie is long enough in the tooth to take a view not just of FAS but of the PPF’s short-comings – read past the first comment.
And Pension Oldie provides us with more food for thought, for the PPF’s drastic levies since formation have been the opposite of a “growth strategy”. This is not political, the early levies were under Labour and since then we have a coalition pension policy (headed by Steve Webb – a Liberal). Since 2016 we have had Conservative and from 2024 we are back with Labour, there is no politics in this, merely a madness that surrounds the security of the PPF which continues to this day.
Rather than let pension schemes take risks, the attitude of Government (DWP and HMT) and regulatory implementer (TPR), has led to an overfed PPF with a surplus of between £7bn to £14bn depending on your measurement. This levy money could be in the hands of employers, the benefits should be in the hands of members. Those who have lost out because of FAS or going further, through no revaluation of pre-97 GMP benefits, have need of recompense – some is being hinted at by our new Pensions Minister.
He needs to understand the impact the PPF insurance mania has had on corporate and trustee strategy. Instead of a “go for it” investment strategy, the result of having paid a substantial insurance premium in the levy, sponsors and trustees have been subject to Section 58(b) of the regulations , making risk-takers criminals and at “risk” of a trip to prison.
What these two elderly but energetic gentlemen are bringing to our attention is the failure of our pension system to allow DB pensions to continue to function. There are a few DB schemes who have found a way to stay open and there are some employers paying defined contributions into savings plans, who want to provide pensions, but the vast majority of employers no longer want a proper pension for their staff. That is a sad change of mood in this country.
The insecurity of having to take all the market risk is what we have left savers with. We have no collective pension system for the majority of people not working in the public sector. The real consistency in pension security goes beyond righting the short comings of the FAS and PPF, it comes when we offer people solid pensions rather then vulnerable pots. I write this after a couple of months when pots have shrivelled under the inanity of US economic policy.