The introduction of the Regulator and PPF is a classic case of unintended consequences. The motivation was good – to provide protection for members of pension schemes that went bust, but the unintended consequence has been to incentivise companies to close pension schemes and reduce pension benefits. This cannot have been the desired objective.
In addition the Regulator, as all bureaucrats are prone to do, is now producing reams of guidelines, additional regulations, reporting requirements etc which are
- making it more and more onerous for people to take on the responsibility of being a Trustee. Again we should be encouraging people to get involved with running their pension scheme, not forcing them out
- forcing employers and Trustees to seek more and more expensive professional advice which takes money out of the pension pot either directly or indirectly
Before the PPF came in there were regrettable but realtively rare instance of schemes defaulting on their liabilities. Now we simply have fewer and fewer schemes – Great result – NOT!