NAPF: Comments on the pensions regulator's mortality consultation paper
Monday, 18 Feb 2008 17:11
Increased Costs Must Be Offset By Lighter Regulation
In response to The Pensions Regulator’s announcement today on its mortality consultation, The National Association of Pension Funds (NAPF) Chief Executive, Joanne Segars, said: “We want to see schemes properly funded and it is right that improvements in life expectancy should be recognised. Many schemes have already taken account of longevity improvements in their funding assumptions.
“The Pensions Regulator and the Government will need to tread carefully if the new period of stability in occupational pension provision is to be more than just a temporary phase. The pressure valve cannot continue to be tightened so any increase in costs must be offset by lighter regulation to help keep existing defined benefit schemes open.
“Examples of lighter regulation include making it easier for surpluses to be returned if people do not live as long as expected or giving employers leeway to increase newly promised pensions by less than inflation if life expectancy rises much faster than expected.”
The NAPF 2007 Annual Survey showed that the proportion of defined benefit schemes that remain open to new members is relatively stable. 31% of open private sector defined benefit schemes are still open to new members, down from 33% in 2006 and 70% in 2002.
Over the next five years 40% of private sector respondents with open defined benefit schemes expect no changes to be made to pension arrangements. 22% expect to modify their schemes while retaining at least some defined benefit elements.
ENDS
About The National Association of Pension Funds
The NAPF is the leading voice of workplace pension provision in the UK. Some 10 million working people are currently in NAPF Member schemes, while around 5 million pensioners are receiving valuable retirement income from such schemes. NAPF Member schemes hold assets of around £800bn, and account for approximately one fifth of investment in the UK stock market.
Journalists requiring further information, please contact Mark Brooks via
020 7808 1312
mark.brooks@napf.co.uk 07917 506683
Mark Brooks
Head of Press
Tel: 020 7808 1312 07917 506 683
Fax: 020 7222 7585
http://www.napf.co.uk
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