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Eversheds co-sponsors Pensions Institute report on stressed defined benefit pension schemes

Eversheds co-sponsors Pensions Institute report on stressed defined benefit pension schemes

  • United Kingdom
  • Pensions
  • Financial institutions

26-01-2016

Eversheds has recently co-sponsored a ground-breaking independent research project carried out by the Pensions Institute, entitled The Greatest Good for the Greatest Number.

The report considers situations where, due to underfunding and weak support from the employer, schemes will not be able to provide full benefits. We hope the research will lead to a greater debate in the pensions industry about the best course of action for trustees and sponsoring employers in these difficult cases.

Jeremy Goodwin, London Head of Pensions at Eversheds, commented:

"The report raises an issue which is politically difficult. It involves acknowledging the unpalatable truth that some schemes have no real hope of delivering the full benefits they have promised. But, debating this controversial topic openly and objectively is necessary. The pensions industry and policymakers want to ensure that stressed schemes end up providing the best benefits that are realistically achievable for their members."

Options considered in the report include:

  • enabling the trustees and employer to take early action to compromise the s.75 debt and agree a final payment that will allow them to secure more than PPF-level benefits for all members
  • allowing schemes which are in financial difficulties to suspend payment of indexation increases which are above statutory / PPF minimum levels
  • changing the PPF compensation rules (which also dictate which benefits take priority when an underfunded scheme is winding up) to make them fairer to all members

View the full Pensions Institute report.

For more information contact

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