The Pensions Trust comes out in support of DWP consultation changes
Issued on: 18 November 2008
The Pensions Trust announced today it welcomes the Department for Work and Pension’s (DWP) informal consultation on changes to the employer debt regime under section 75 of the Pensions Act 1995.
Commenting, Stephen Nichols, Chief Executive of The Pensions Trust said; "Since 2005, many employers have encountered difficulties in restructuring their operations as a direct result of the current employer debt regime
We have several examples of employers participating in the same scheme that wish to merge in order to strengthen their value, benefit from economies of scale and become more efficient generally. The current employer debt regime creates obstacles which stifles such mergers even though such mergers would not only be in the best interests of the business but also in the interest of the members of the pension scheme, who would benefit from the stronger covenant going forward."
In its response to the 2007 consultation on changes to the Employer Debt on Withdrawal Regulations The Pensions Trust’s asked the DWP to seriously reconsider making internal restructurings, where there is no weakening of the employer covenant (indeed business sense is that the resulting covenant is likely to be stronger) exempt from the definition of ‘cessation event’. We are pleased to note that the DWP has taken our request on board.
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