Conservative party refuses to bail out Pension Protection Fund
A Conservative government would not underpin the financial liabilities of the Pension Protection Fund (PPF) according to the shadow pensions minister Nigel Waterson. While this headline will make uncomfortable reading for many in the UK who are concerned about their employer pension scheme, there is a reason why the authorities would not automatically underpin compensation payments funded by the PPF.
As experts predict a massive increase in compensation liabilities for the PPF the Conservative party has suggested that a cast iron pledge to underpin the financial liabilities of the PPF may result in a "more lax environment within the pension arena". In simple terms, the Conservative party believes that with a cast-iron pledge that taxpayers would cover any shortfall in the pension arena this could give trustees an excuse to take undue risks.
Whether or not trustees would put themselves in a position whereby a fund was seen to be taking "undue risks" is another matter but the idea that the taxpayer would pick up ALL compensation liabilities in the future is one which could turn out to be very expensive - if such a pledge was put in place. There is enough pressure on the state benefits system without adding more potential liabilities, the total of which would never be quantifiable.
Share this..
Related stories
Kodak Pension Plan Members to receive reduced Benefits
Members of the Kodak Pension Plan (KPP), of which there are thought to be 15,000, will receive reduced pension benefits after Kodak’s parent company, Eastman Kodak, was declared bankrupt. KPP was forced to pay £419m to buy the business and in doing so save the company from closure. KPP now owns the companies entire film business, which consists of hundreds of thousands of photo kiosks w...
Read MoreWill final salary pension schemes ever disappear from the public sector?
Despite repeated warnings from various associations in the UK, it would appear that the UK government is still charging headlong into a potential pension fund nightmare with more and more public sector final salary pension schemes in deficit. Only yesterday we saw the revelation of a £60 billion black hole in local authority pension schemes which UK taxpayers will be forced to bail out. So will f...
Read MoreHave you considered your pension fund arrangements?
As the controversy regarding the UK budget continues to die down many people are now looking towards the future and their pension fund arrangements. However, there are a growing number of people in the UK who have either ditched their short-term pension arrangements or not even considered them. These are the people who will suffer severely as the value of the UK state pension continues to fall in...
Read MoreBT announces profits fall but pension fund concerns are greater
Despite announcing first-quarter figures which showed profits down 45%, it is the issue of BT's final salary pension scheme which is causing more concern amongst investors. This is the largest UK final salary scheme in existence and is currently said to be around £8 billion in deficit. Even though the figure of £8 billion may well have fallen after the recent run of the UK stock market, there ar...
Read MorePension fund deficits continue to rise
It has been revealed that the U.K.'s top 200 pension schemes are in deficit to the tune of £100 billion. While there has been intense speculation over the last few weeks regarding the size of pension scheme deficits in the UK, the fact that the £100 billion figure has been breached for the first time ever is a massive blow to the sector. Even though there are obviously enormous implications f...
Read More