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Pensioners have warned that it is unlikely that the government will be impacted to the government’s desired economy by making it possible to access the surplus trapped in the defined benefit pension system.
This week, the British government said that the DB pension system has canceled the restrictions of companies spending money.
According to FT analysis of a company account, FTSE 100 has more than 30 companies with at least 100 million pounds and at least 110 % of DB schemes. Most people rejected comments when they were contacted by FT.
Energy Company SSE has said that the reform is represented by reform, but has pointed out that the effect is relatively small.
After the announcement, SchroDers said that it would use the annual excess of the DB section of the scheme to support the defined contribution members’ funding.
According to the pension consultant LCP, most schemes can already access the surplus with the DB scheme if they pass a resolution in 2016 to allow them to do so. However, in fact, it is rarely done.
According to last year’s government estimates, companies have accessed £ 18 billion between 2018 and 2023. The extracted surplus is taxed at a 25 % tax rate from 35 % last year.
If the DB and DC pension funds are set in the same trust, or if the scheme rules are allowed to allow tax expenses, you can transfer DB surplus to DC members.
The trade group has greatly welcomed the government’s proposals if the right guardrails are in place to protect the members, but the trustee has personally expressed their doubts.
“Why do you want to give a comfortable blanket?” One trustee of the FTSE 100 corporate pension system said. He is skeptical that he is ready to release the surplus to the executives, has been in the red for many years, and the decline in government bond yields can make the financing position more vulnerable. I pointed out that there is sex.
“The government does not become a silver bullet,” said another person, adding only about 68 billion pounds on the acquisition basis.
“First, we need to solve how much the members are given. Next, we need to agree to the company that needs to pay 25 % of the tax.” Say, the time it takes to make these decisions is “not trivial.”
Rob Gardner, a former co -secretary of Ledington, a pension consultant company, and founder of REBALANCE EARTH, a flood easing investor, is “important if he is a counselor who compares the return of surplus to the employer. He stated that there was a problem.
“My duty is to act for the best benefits of the members, and the potential long -term risk for them may exceed short -term interests to the employer,” he said. I said.
The government estimates that about 75 % of the UK’s £ 1.2TN’s defined corporate pension system is surplus and a total of about £ 160 billion. About 96 % of these schemes, which provide pensions to 8.8 million, are closed to new members.
Recommendation
The Minister has raised how to withdraw money from the DB scheme after rapidly improved the funding level of the stamped scheme in 2022 in 2022. The government’s plan will follow conservative government talks last spring.
Policy proprieters also hope that the trustee will encourage the trustee to invest in more dangerous assets, rather than preparing a scheme sold to the insurance company in the known process.
However, Sankar Mahalingham, a manager of a professional trustee Law Debenture, said, “It’s unlikely that many people suddenly have a different investment strategy can see.”
According to the pension protection fund, the scheme had a pure deficit in 2019 based on nearly 500 million pounds. The numbers are currently surplus of 68 billion pounds.
When Financial Times asks the Ministry of Finance whether to lower the “purchase criteria”, a spokeswoman says, “The scheme must meet the strict funding requirements to acquire surplus qualifications.” I mentioned.
In the previous government talks, whether to investigate the strengthening of the protection from the pension protection fund, encourage the trustee to get used to taking over more risks, release the surplus, and lower the tax rates of tapping surplus. I encouraged me to evaluate.
The Ministry of Finance told the FT that “in the spring” will clarify these details.
