Paul McBride on the Pensions Bill
Paul McBride, head of governance for Capita Employee Benefits’ Atlas Master Trust, comments on the recent publication of the Pension Bill.
“Providing greater protection to master trust scheme members through tighter regulations is to be welcomed. It is vitally important that mastertrusts have viable business plans.
It is equally important that there is a credible discontinuance and exit plan should a master trust funder decide they either don’t wish to, or can’t afford to, carry on. But because there are so many varieties of mastertrust, with different funder and sustainability risks, legislation should not be overly prescriptive or too blunt about the contents of such a plan. Capital reserves have a place but are by no means the only option. Other, equally credible and less blunt options exist where the Funder’s credentials and guarantees can be relied upon by Trustees.
It’s disappointing that the Bill does not deal with the well aired problems around bulk transfer certification in a DC environment. If legislation won’t resolve this, hopefully sensible debate can. When a bundled outcome is the inevitable trajectory, how is it appropriate for an actuary to compare unbundled and bundled Reductions in Yield? The one option that won’t be on the table is the unbundled status quo – so why is that the starting position?”