After the 2008 financial crisis, many DB schemes’ funding deficits escalated, resulting in a number of high profile cases where employers were no longer able to meet their pension liabilities, for exmaple the Tata Steel, BHS and Carillion schemes. As those cases illustrate, DB schemes are complex, requiring the right balance between long-term sustainability, affordability and member protection.
Current Developments in the DB Landscape:
In 2017, the Department for Work and Pensions (DWP) issued a consultation on the future of DB pensions to ascertain the challenges currently facing schemes, opportunities to improve them and means to protect scheme members.
In March 2018, the DWP published Protecting defined benefit pension schemes – a White Paper setting out the Government’s views on potential solutions to help improve the system.
In April 2018, the Work and Pensions Select Committee launched an inquiry on the DWP’s White Paper The results of the inquiry will inform the subsequent consultations on various aspects of the White Paper, including consolidation, due later in 2018.
At the end of June 2018, the DWP issued a consultation with proposals to strengthen The Pensions Regulator’s powers to enable it to intervene and ssue fines or criminal offeces for wilful or reckless behaviours leaving pensions schemes at risk.
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