DWP Select Committee report – LCP reaction – ‘Pension rules need to reflect the world of today not the world of yesterday’

The Work and Pensions Select Committee has published its long-awaited report on Defined Benefit pension schemes. LCP submitted written evidence to the Committee, and LCP partner Steve Webb gave oral evidence early in the Committee’s inquiries.

Commenting on the report’s findings, Steve Webb said:

“So many of today’s rules and regulations around pensions were born of a world of pension deficits and worries about member pensions being paid. Today the world is very different, with the majority of schemes running a surplus and debating how best to use it. I agree with the Committee that pension rules and regulations need to reflect the world of today, not the world of yesterday.

In particular, the rules have not caught up with the new world of surpluses, which may mean that schemes and members do not get the most benefit from their improved financial position. The Government needs to decide urgently how it can make sure member benefits are secure and, at the same time, help companies, members and the wider economy benefit from the assets of over £1 trillion, which are still sitting in these schemes. In our view, the offer of a full PPF underpin in exchange for payment of a new super-levy remains the best way to achieve this.”