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Labour want firms with defined benefit pensions schemes in surplus to be able to access that surplus for investment (suggested by Jeremy Hunt before the election).
You'll recall in the past when DB pension plans were in deficit, rather than make up shortfalls, many were shifted to defined contribution (transferring risk to members) or effectively wound up.
One might argue DB schemes now in surplus *were* supported by their sponsoring firms but this still looks skewed to me.
#pensions
h/t FT
@ChrisMayLA6 What happens when it all goes to shit. Do the pensioners suffer or do the firms sell their investments to make up the short fall?
Well, in the past, when DB pensions went into deficit, the better firms (likely those that remain with DB schemes) did make up the shortfall - having often taken contribution holidays in the past - but the worse firms, merely sold off the scheme to handing firms & closed them to new pensioners, or converted to defined contributions, thereby transferring the ingoing risk to scheme members - what happens in the future is anybodies guess
@ChrisMayLA6 @cyberspice
Sounds like forcing employees to put all eggs in one basket. This is a really dumb idea, that will end up with the Government footing the bill for failed schemes.
@ChrisMayLA6
Taking us back to the Maxwell days.
Recipe for pension robbing.
Yup, my feeling too...
@ChrisMayLA6
Hard no. Pensions belong to workers.
One has to wonder whether anyone in #hmtreasury consulted the #debtmanagementoffice about this! #definedbenefitschemes tend to hold a lot of gilts for fiduciary and prudential reasons . Not clear why one would want to discourage this at a time when there are jitters anyway in the gilts market. This does not look much like any kind of 'joined up thinking' !
no joining up going on whatsoever....