Source · Select Committees · Work and Pensions Committee
Recommendation 16
16
Accepted in Part
Paragraph: 149
Halt plans for new funding regime until full impact assessment is produced.
Recommendation
There are two fundamental concerns with the new funding regime. One is that the approach is not sufficient to allow open schemes to thrive. This is an issue to which we will return in our wider inquiry on defined benefit pension schemes. The second is that it will result in greater ‘herding’ in investment decisions. In light of the FPC’s recommendation for TPR to take account of financial stability, DWP and TPR should halt their existing plans for a new funding regime, at least until it has produced a full impact assessment for the proposals, including the impact on financial stability and on open DB schemes.
Government Response Summary
The government rejects halting plans for a new funding regime, stating the draft Regulations will be laid in due course, but commits to accompanying them with a full impact assessment considering financial stability and open DB schemes.
Paragraph Reference:
149
Government Response
Accepted in Part
HM Government
Accepted in Part
DWP plan to lay the draft Occupational Pension Scheme (Funding and Investment Strategy and Amendment) Regulations 2023 before Parliament in due course and it will address this matter. A full impact assessment will accompany the draft Regulations. The Impact Assessment will consider the interactions of the Regulations with the wider macroeconomic environment. These issues will be monitored closely by the Secretary of State for the Department for Work and Pensions and through regular assessment of the data collected by the Office for National Statistics, the PPF and TPR, and DWP will publish a report at least every 5 years.