Government now encouraging the C-Suite Pension Strategies approach

​Government has written to tell the CEOs of The Pensions Regulator and Financial Conduct Authority to “encourage alternatives to derisking and buyout”.  C-Suite’s theme that “Run On Pays Off for all stakeholders” aligns with public policy.

Jeremy Hunt, the Chancellor of the Exchequer and Mel Stride, Secretary of State for Work and Pensions, write in their letters that:

• We collectively believe there is an opportunity for savers to get better outcomes from their pension arrangements. The time to take action to improve outcomes is now.
• Encouraging alternatives to DB de-risking and buyout, where schemes are well-funded with a strong employer covenant - making their assets work harder and enabling continued investment in a broad range of assets, through clearer funding standards in Regulations, a Code of practice and guidance, and making it easier to share investment returns between sponsors and scheme members
• This is a long-term agenda and will need all parts of the pensions delivery and regulatory system to operate in alignment with this vision.

In September C-Suite Pension Strategies wrote to DWP in the Call for Evidence on DB pensions and stated that one sentence from Government would be transformational for the allocation to productive assets and pension provision for past and present employees : 
“The Government encourage sound sponsors and trustees of well financed DB schemes to run on and modernise them to be ESG Flagships in all stakeholders’ interests.”

C-Suite has worked on run on ideas for 5 years and knows how to implement them within existing regulatory and legal frameworks.  The action Government wants can start now.

Commenting on the Autumn Statement and related letters, C-Suite’s CEO William McGrath said “’Derisk and get rid asap’ now runs against public policy for strong DB scheme sponsors.  ‘Run On 4 Good’ replaces the endgame.”

Contact us and our leading partners can help you respond positively to the Government’s initiative.

The letter to Nausicaa Delfas, Chief Executive of The Pensions Regulator is shown below.  The same letter was sent to Nikhil Rathi, Chief Executive of the Financial Conduct Authority.   The letters add to paragraph 4.34 in the Autumn Statement on investment in productive assets and the sharing surpluses and tax reductions.

4.34 To increase opportunities for defined benefit schemes to invest in productive finance while fully protecting member benefits, the government will consult this winter on how the Pension Protection Fund can act as a consolidator for schemes unattractive to commercial providers and whether changes to rules around when surpluses can be repaid, including new mechanisms to protect members, could incentivise investment by well-funded schemes in assets with higher returns. The authorised surplus repayment charge will also be reduced from 35% to 25% from 6 April 2024.