Commenting on the government’s green paper on defined benefit pension schemes, John Wilson, Head of Technical, JLT Employee Benefits, said:
“We welcome the publication today of the Government’s much awaited Green Paper on the security and sustainability in defined benefit pension schemes. With the prospect of millennials being the first generation to have worse pensions than their parents, the chance to debate and address the inter-generational unfairness of legacy DB pension schemes is an opportunity not to be missed. However, as the document is very light on details, the Government isn’t giving a clear indication of the direction of travel.
“This means that, more than ever, the pressure will be for all stakeholders, including employers, trustees, members, policy makers and the pensions industry, to act together and explore the options for achieving a lasting DB settlement. The solutions discussed should be in support of all schemes, not just those already in distress. In a recently published whitepaper, JLT Employee Benefits has offered a number of recommendations to achieve what we believe would help to address those DB pension sustainability issues (JLT: How do we get out of this Pensions Black Hole?).
“On consolidation, the paper rejects proposals for the Government to run an arms-length body to consolidate DB schemes, but it seems to encourage the industry to press forward with this. We believe that by consolidating DB pension schemes into mastertrusts, employers could cut costs by £500 million per annum collectively. The £500 million savings would result from a reduction in administration and investment costs, as well as lower actuarial, covenant and legal costs. Simplifying complex benefit structures should also be an area of focus for the industry and policy makers. While the exact savings would be scheme-specific, they could be very beneficial for employers overall.”
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 40 territories with some 10,600 employees. Supported by the JLT International Network, it offers risk management and employee benefit solutions in 135 countries.