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The Actuary The magazine of the Institute & Faculty of Actuaries

Stop press: Pensions Bill

A massive yawn greeted the publication of the long-foreshadowed Pensions Bill last month. Prior to publication, employer organisations had warned that the Bill could destroy pensions provision by requiring cross-subsidy from healthy firms and schemes to those which are less healthy. Department for Work and Pensions secretary Andrew Smith sought to defuse this criticism by committing to moving to a risk-based contribution rate basis to the new Pensions Protection Fund as soon as possible.

This failed to allay completely fears which owed something to the disclosure of a record deficit by the equivalent US body – the Pensions Benefit Guaranty Corporation. All of the NAPF, PMI, and ACA also criticised the length and complexity of the draft Bill, which appeared to run counter to the government’s professed aspiration for simplification. While all agreed that the bill was well intentioned, this faint praise was accompanied by criticism of the apparent vacuum in government policy on pensions.

Of course, the challenges of pension provision in uncertain financial markets and against a background of uncertain retirement patterns and life expectancies are not simple. We hope to carry more considered digestion of the implications of the new Bill in the next issue of The Actuary.