The Department for Work and Pensions (DWP) is looking into whether the regulatory burden on defined benefit (DB) schemes can be relaxed in order to ensure employers contribute to economic growth rather than fund scheme deficits.
In the Autumn Statement chancellor George Osborne said the ‘government is determined to ensure that defined benefit pension regulation does not act as a brake on investment and growth’.
Following this the DWP has published a call for evidence on the following questions.
- whether companies undergoing valuations of their DB pension deficits should be allowed to smooth the calculation of their asset and liabilities.
- whether The Pensions Regulator should be given a new statutory objective to consider the long-term affordability of deficit recovery plans to sponsoring employers.
Pensions minister Steve Webb said it was important to find out if there was more the government could do to give employers more room for manoeuvre.
‘We need to know whether the current regulatory framework is sufficiently flexible for employers with defined benefit pensions or whether there is more we could reasonably do,’ he said.