25 July 2007 - O’Brien welcomes review of pensions legislation
Minister for Pensions Reform Mike O’Brien today welcomed an independent report examining how workplace pension provision could be encouraged by easing the burden of regulation on employers.
The Deregulatory Review report was produced by external reviewers Chris Lewin and Ed Sweeney. They were asked in their terms of reference to seek consensus on the balance between member protection and encouraging employer provision of pensions.
Minister for Pensions Reform Mike O’Brien said:
“I would like to thank Chris Lewin and Ed Sweeney for all their hard work over the last seven months and for their thorough and thoughtful report.
“We want to lighten regulation, and when doing so will be mindful that it is important that we strike a balance between protecting members' benefits and encouraging employer provision of pensions. As the reviewers acknowledge, it is not an easy balance to strike.
“I am pleased that the focus of their report is to find ways to encourage sustainable pension provision for employees in the future - not only via ‘traditional’ defined benefit and defined contribution pension schemes, but also through innovative approaches where both employers and employees share the risks inherent in pension provision.
“We will now consider their carefully balanced recommendations. We expect to produce a full response in the autumn outlining decisions for further action.”
The key recommendations for changes to the current legislation are:
- Changes which might make it easier for employers to get back surplus funds in their own pension schemes
- A move towards less detailed and prescriptive legislation, starting with simpler rules on what schemes must tell members
- Changes to the circumstances in which an employer leaving a multi-employer scheme has to make a payment to the scheme
- Making it easier for schemes to change their own rules to take advantage of changes to legislation
- Concentrating the requirement for trustee expertise at board level rather than on individual trustees
The reviewers have said that no changes should be made to legislation which would adversely affect pension rights already built up, or pensions already in payment.
Ministers will carefully consider the recommendations and will be discussing them with key stakeholders over the summer, before publishing a response in the autumn.
Notes to Editors
- The report can be read at www.dwp.gov.uk/pensionsreform/deregulatory_review.asp
- Chris Lewin and Ed Sweeney were appointed to act as external reviewers to the Deregulatory Review in December 2006. The Deregulatory Review was announced in the White Paper Security in Retirement: towards a new pension system which was published in May 2006.
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