‘Reckless’ Solvency II-style capital requirements for defined benefit (DB) pension schemes would cost UK employers £150 billion, according to pensions minister Steve Webb.
Speaking at the European Retirement Federation in Frankfurt, Webb said: ‘The new figures show us just how devastating the impact of the European Commission’s wrongheaded proposals would be…
‘We are urging Brussels not to pursue these dangerous, reckless plans. In Britain, we are making reforms to ensure our pension system is sustainable. In Europe, we should be working together to tackle real pension challenges, and find ways of better sharing the risk of providing pensions between the employer and employee.’
The Department for Work and Pensions estimates the number of DB schemes open to new members could fall from 16% to 5% over the next 20 years and that the proposed reforms would only accelerate, rather than reverse that proses.