LONDON (7 December 2018) – Aon, the leading global professional services firm providing a broad range of risk, retirement and health solutions, has commented on the Department for Work and Pensions’ (DWP) consultation, ‘Consolidation of Defined Benefit Pensions Schemes’, which seeks views on a new legislative framework for authorising and regulating DB ‘superfund’ vehicles.
Matthew Arends, head of UK Retirement Policy at Aon, said:
“The DWP’s consultation brings much-needed clarity on the direction of travel that the DWP anticipates for these new consolidation vehicles. Having said that, in a number of key areas, the DWP has put forward several options for the future, which means there remains considerable uncertainty over the regime under which consolidators will operate. This in turn will make transactions difficult in the short term.
“However, interestingly and for the first time, the consultation brings the prospect of The Pensions Regulator regulating the sponsoring company as well as the pension scheme itself. Additionally, aspects of the regime for consolidators are much closer to that in operation for insurance companies than for other occupational pension schemes. This adds up to TPR taking on a much more involved supervisory role in the future.”
Matthew Arends continued:
“One aspect we had expected to see in the consultation but which hasn’t been included, is the accurate communication of the consolidator proposition to potential transferring trustees and companies. We believe it is crucial that the risks and costs are transparently and accurately portrayed so that there is confidence in these vehicles.
“Related to this, is that there are no additional requirements to communicate with members prior to consolidator entry– other than the normal requirements for bulk transfers. While we acknowledge that members will transfer without consent into the consolidator and that pensioner members will not be able to transfer out subsequently, we believe that additional member communications prior to entry – and which give more information about the consolidator vehicle – will be essential.”
For further information please contact:
Colin Mayes Charlie Bristow
Aon Kekst CNC
01372 733689 07973 667291
Notes to Editors
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