The Pensions Regulator has opened a debate over corporate deals that could lead to pension schemes being abandoned by employers. In a discussion paper, the regulator told scheme trustees that they needed to identify, and consider the implications of, transactions that may result in abandonment. It follows concern that companies are trying to transfer pension scheme liabilities to new companies that may not have the finances to properly support them.
Recently there has been a hue and an outcry about working people NOT saving enough to ensure a reasonable retirement income. Why? Perhaps one key reason is the fragility of the governmental ISA’s/ISSA’s and the private-sector retirement savings plans? These plans look good for a year or two, then — they are folded up, terminated or made otherwise unattractive.PRimage believe it would be to the advantage of the Conservatives to develop a policy to ringfence all present and future pension savings plans — the money to earn interest exclusive of taxes, to be guaranteed by an iron clad law and — for the pension investor to know that his or her monies are safe from intrusions or taxation by the next government!
The private/corporate pension plans must deposit an adequate financial reserve with the government to guarantee eventual benefits as promised! With the pension contract holders having first call on the resources of the Plan in case of bankruptcy. If this requirement results in the termination of some corporate (or private) pension schemes — so much the better. Better now rather than when the employees or plan holders with financial institutions are about to retire with bad news!
Judy Viitanen and the PRimage team believe the Government must cleave onto its promises! Plans must not be terminated or modified in mid-stream; deposits made in good faith (and the derivative tax-free earnings!) must be honoured for the lifetime of the depositor. Pensions must not become a convenient source of tax revenue at the will of Parliament. The certainty and safety of retirement savings will in time help ensure a reduction in revenue outflows to support pensioners.
What’s your view on the thorny issue of pensions planning? Post a comment.