In reaction to the PLSA's final report of its DB Taskforce Opportunities for Change, John Wilson, Head of Technical, JLT Employee Benefits, comments:
“We welcome this contribution to the DB ‘black hole’ debate. In particular, we support benefit simplification as a realistic option for addressing pension scheme deficits. As the PLSA says, unless something is done, many schemes will end up in the PPF and members’ benefits will be reduced – potentially by around 25%. However, the PLSA has much work to do in terms of winning over hearts and minds in relation to their ‘superfund’ proposal.
“The new Chair's statement for DB scheme trustees is a reasonable idea, but of much more use for member would be a requirement for trustees to be more transparent to members about the risks attaching to their benefits, e.g. better disclosure on solvency position and commentary on the amount of support that the pension scheme is relying on from the employer.
“Proposals to exchange covenants for funding are more controversial. There will be concerns over security of members’ benefits and scepticism that this will just end up being reduction of benefits ‘through the back door’.
In a whitepaper published earlier this year, JLT Employee Benefits has offered a number of recommendations to achieve what we believe would help to address those DB pension sustainability issues. Please see our report How do we get out of this Pensions Black Hole? for more information and to request our paper.
Notes to Editor
JLT Employee Benefits
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About JLT Employee Benefits
JLT Employee Benefits is one of the UK's leading employee benefit providers offering a wide range of benefit and pension services, including administration, actuarial and pension consultancy, investment, Self Invested Personal Pensions (SIPPs) and Small Self Administered Schemes (SSASs) administration, flexible benefits, healthcare, benefit communication and financial education.
JLT Employee Benefits employs over 2,200 professionals throughout the UK and in 2013 had revenues of £172m in UK & Ireland.
Pensions and employee benefits companies within the JLT Employee Benefits group of companies include: JLT Benefit Solutions Ltd, Profund Solutions Limited, JLT Wealth Management Limited, JLT Investment Management Limited and Independent Trustee Services Limited. JLT Employee Benefits is part of Jardine Lloyd Thompson Group plc.
About Jardine Lloyd Thompson Group plc
Jardine Lloyd Thompson is one of the world's largest providers of insurance and employee benefits related advice, brokerage and associated services. JLT's client proposition is built upon its deep specialist knowledge, client advocacy, tailored advice and service excellence.
JLT is quoted on the London Stock Exchange and owns offices in 41 territories with some 10,600 employees. Supported by the JLT International Network, it offers risk management and employee benefit solutions in 141 countries.