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Webb attacks ‘reckless’ DB rules with £400bn impact

by William Robins on Nov 21, 2012 at 09:49

Webb attacks ‘reckless’ DB rules with £400bn impact

‘Reckless’ Solvency II-style capital requirements for defined benefit (DB) pension schemes would cost UK employers £150 billion, according to pensions minister Steve Webb.

Webb (pictured) said planned European Union rules to use a Solvency II-style basis to measure pension liabilities could increase DB pension shortfalls by £400 billion.

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.

4 comments so far. Why not have your say?

Julian Stevens

Nov 21, 2012 at 10:16

Yet another example of why the UK should withdraw completely from membership of the EU. Of what value is it to us? We'd be better off right out of it. Why doesn't the UK government tell Brussels that we're just not going to go along with Solvency II and all their other barmy ideas?

That having said, 25 years of needless and damaging government interference has already all but wrecked the UK pensions landscape anyway. Or hadn't you noticed, Mr Webb? When are you going to start doing something useful such as calling for action on the annuity rates trap? Or have your political masters instructed you to keep quiet about that and talk about other things instead?

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David Botterill-Scott

Nov 21, 2012 at 12:05

If it isn't Gordon Brown, it's bound to be Ted Heath.

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Derek Guyers

Nov 21, 2012 at 12:15

"‘Reckless’ Solvency II-style capital requirements for defined benefit (DB) pension schemes would cost UK employers £150 billion."

I fear that the last funded DB schemes to go will be the local government schemes which means that most of the £150bn shortfall will fall on the UK taxpayer.

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Julian Stevens

Nov 21, 2012 at 12:37

Even worse, many of the public sector schemes aren't even funded, so quite how they'll conform to Solvency II is anyone's guess.

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