'Overbearing' regulation has hurt pension schemes more than changes to the tax system claims Aon Consulting.
As a result the company is calling for a moratorium, or delay, on pension regulation as it claims the Pensions Act and A-Day have significantly increased the burden on trustees in the occupational pension scheme sector.
Donald Duval, chief actuary at Aon Consulting, says as a result of the increased burden on schemes it expects only 18% of occupational Defined Benefit (DB) schemes to be open to all staff by 2009, with around 29% to be closed to everyone compared to just 9% now.
And he claims the introduction of age discrimination legislation on 1 December is the latest set of regulations expected to hurt pensions provision, despite politicians from all parties calling for greater pension provision.
Duval says: “A moratorium on pensions regulation is long overdue. However with the National Pension Savings Scheme (Npss) and other initiatives on the agenda momentum shows little sign of slowing. The aggregate effect of regulatory changes adds to the risks of running pension schemes and is extremely damaging.”
Aon’s call for a halt to pensions regulation follows the government’s decision, announced in the pensions white paper, to conduct a ‘rolling deregulatory review’ of the legislation surrounding pensions.
Since then the Department for Work and Pensions (DWP) has already stopped the disclosure of information regulations for occupational schemes as part of the review, although Lord Turner, former chairman of the Pensions Commission, said earlier this month that deregulation would not improve the pensions landscape.
Speaking at a Chatham House conference Turner said: “I am not convinced the deregulation of pensions will make more than a minor difference to the amount of pension provision provided voluntarily by the corporate system.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
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