Millions May Lose Promised Company Pension. PLSA report says millions may lose promised company pension. According to the latest report from the Pensions and Lifetime Savings Association (PLSA), 3 million people in the UK could be at risk of receiving less of a company pension fund than promised.
A taskforce from PLSA was recently put together to Investigate and review options to help Pension Schemes facing underfunding. According to research, over the last ten years, £120 billion in special company contributions has been injected into company schemes. Despite this, there are reports of a £400 billion deficit. The report also suggested that many of the company schemes were on track to meet their pension promises. However, 3 million of them had a 50:50 chance of failing to meet obligations.
Ashok Gupta (Chairman of PLSA taskforce) said: “More than 11 million people rely on Defined Benefit Pension Schemes…..there’s a real possibility that without change we will see more high-profile company failures such as BHS or Tate Steele. It is vital that action is taken to address covenant risk, underfunding and the current lack of scale in the majority of schemes.”
One suggestion on the table is pooling sources into superfunds. Companys would pay a fee to transfer Benefit schemes into a larger fund. It would afford better investment opportunities and hopefully, see better returns.
Others ideas include companies being required to produce annual statements to ensure that they stay on track with pension schemes. Or suggesting that the Government take action to simplify and consolidate the different benefit structures.
Millions May Lose Promised Company Pension
This latest PLSA report comes to light after news that former BHS owner, Phillip Green has agreed to pay a cash settlement of £363 million to plug the deficit in the BHS pension scheme. Since its collapse in April 2016, 19,000 ex-employees of the company have faced uncertainty over whether their pension schemes will stay intact. The result of lengthy negotiations between Mr Green and the Pensions regulator PPF will now mean that workers will receive the starting pension that they were originally promised.