“There are over 6,000 defined benefit (DB) schemes in the UK, with 11 million members and over £1 trillion of assets so it’s important to make sure schemes are secure and working hard for both members and the wider economy. As this report highlights these schemes are operating in a very challenging environment and even the most supportive sponsoring employers find themselves making very difficult choices about how best to balance the interests of their DB scheme and the wider business which supports the scheme, its members and many other employees.
“In this case the Committee has reached a clear conclusion that the sponsoring employer was not supportive and says Sir Philip Green ‘and his directors repeatedly resisted requests from trustees for higher contributions’ to the scheme and concludes that the ‘massive deficit is ultimately Sir Philip Green’s responsibility’. This sends a welcome and strong message about employers’ duties to the millions of defined benefit pension scheme members in the UK.
“The Committee’s commitment to ‘investigating how to secure a fair and sustainable settlement’ can be reached is also very welcome, including its focus on whether the balance in the regulatory framework is correct in that it can offer both adequate protection and strong enough recourse for schemes and trustees. It is important to recognise that over the last decade employers have put a record amount of money into DB schemes generally but this has made little impact on funding levels because the challenges facing schemes are complex and varied. The PLSA’s DB Taskforce has been set up to gain a thorough understanding of these challenges and propose some solutions. The Taskforce will share its work and findings with the Work and Pensions Select Committee and we believe these will be helpful to the wider inquiry into DB schemes the Committee has planned.”
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