22 Jun Rosalind Connor comments in Pensions Expert on the British Steel proposed scheme changes
In Pensions Expert’s coverage of the proposed scheme changes by BSPS, Rosalind Connor provides her input on the potential consequences of such changes. The proposed changes include an exemption from the Pension Protection Fund and a separation from Tata Steel UK.
Rosalind said that in themselves, the proposals to change scheme rules and separate a scheme from its sponsoring employer are not contentious, as both have been done before.
A bigger challenge, she said, is that conflict might arise if the government resists extending legislative exemptions to other schemes. She remarked that the “unique nature” of BSPS’s challenges “appears to largely be about being bigger than other schemes, which does not chime well with employers, trustees and members of small schemes with exactly the same issues”.
However, she conceded that for a scheme of BSPS’s proportions, it may be very difficult to track down all members, including many former Tata Steel employees, for a response.
Connor pointed out that switching to the consumer price index is too narrow a solution. “It doesn’t deal with the issues that people are living longer and there is uncertainty and cost around that,” she said.
She added that BSPS’s proposal not to use any future surplus to reward employers or sponsors is reasonable, since this practice is becoming increasingly obsolete, and that redirecting it towards member benefits seems like “the sensible route”.
Read the full article in Pensions Expert here.