The UK government has announced pension reforms aimed at loosening rules regarding surplus funds in defined benefit (DB) schemes, raising alarms from experts who warn that this may endanger the retirement security of millions. Proposed changes would facilitate employer access to surplus funds, purportedly to drive economic growth. However, the Pension Security Alliance cautions that this could destabilize pension schemes, risking their financial integrity and members' benefits. The Department for Work and Pensions insists these measures will include safeguards, with stakeholders urging reconsideration of the potential risks involved.
"The proposed changes would loosen rules on how surplus funds can be extracted from defined benefit pension schemes, allowing employers to reclaim billions of pounds currently locked within retirement funds."
"The Pension Security Alliance warned that extraction before securing members' benefits risks those schemes running short, potentially leading to some schemes collapsing."
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