Source · Select Committees · Work and Pensions Committee
Recommendation 17
17
Acknowledged
Paragraph: 130
Explain the core aim of a public consolidator for pension schemes
Recommendation
There may be a good case for a public consolidator. However, there are complex issues to address, particularly in relation to who would underwrite the risk, the impact on member benefits and how its introduction would be justified. In response to this report, the Government should explain whether the core aim of a public consolidator is to rescue stressed schemes likely to enter the PPF in any case, or is it for small schemes who may face challenges accessing the buy-out market.
Government Response Summary
The government stated it is exploring whether a small, focused Government Consolidator could be an option for schemes less attractive to commercial providers, and will respond to a consultation on this in the spring, but did not definitively explain its core aim.
Paragraph Reference:
130
Government Response
Acknowledged
HM Government
Acknowledged
The Government is committed to improving outcomes for DB pension scheme members by ensuring that they receive the pensions promised by their schemes, supporting employers in finding ways to secure their legacy closed DB pension liabilities, and driving economic growth by opening up investment opportunities. A private pensions market that encourages consolidation will play a key role in supporting the Government to deliver on this commitment. The commercial market will offer solutions through buy-out, Superfunds and consolidation. However, this may not work for everyone. The PPF could play a valuable role in DB consolidation, particularly with its track record of investing in UK productive finance and its experience of consolidating over 2,000 schemes into the PPF and Financial Assistance Scheme (FAS). We continue to explore whether a small, focused Government Consolidator, run by the PPF, could be an option for schemes less attractive to commercial providers. Stakeholder feedback to the ‘Options for Defined Benefit schemes’ consultation will help shape what we do, and the Government will respond to the consultation this Spring.