More powers urged for final salary pension schemes
Businesses should have to get clearance from the pensions watchdog before being allowed to do any deals that could affect the security of final salary pension schemes, according to Edinburgh-based insurer Aegon.
The call came as MPs look into the protection of defined benefit pensions following the collapse of retailer BHS, which had a £571 million blackhole in its schemes.
The Work and Pensions select committee will focus on areas including whether the pensions watchdog should have more powers to intervene to protect employees in schemes.
Kate Smith, head of pensions at Aegon, said the inquiry was timely given recent figures showing that more than 80 per cent of such schemes are underfunded. She added: “This is only going to get worse following a fall in base rates and a new round of quantitative easing, on top of increasing longevity, causing even more pain for employers.”