Existing laws ‘putting people’s pensions at risk’
7 May 2016
- From the section Business
The chancellor has been warned that gaps in existing pension laws “could put the retirement savings of many thousands of people at risk”.
Work and Pensions Committee chairman Frank Field wrote to George Osborne urging new rules in the Queen’s Speech.
The High Street retailer’s pension scheme has a deficit of £571m.
Employers must by law automatically enrol most employees on a workplace pension scheme, know as “pensions automatic enrolment”.
In his letter to the chancellor, Mr Field said the committee had heard “concerning evidence”, including from the pensions regulator itself, about “gaps in the regulatory framework” that had allowed “potentially unstable master trusts onto the market.”
“Our evidence suggests that this could put the retirement savings of many thousands of people at risk.”
A master trust has a board of trustees that oversee more than one defined-contribution workplace scheme.
Mr Field added: “The committee’s inquiry into the Pension Protection Fund and pensions regulation is similarly encountering concerns over the range and effectiveness of powers available to both the regulator and fund trustees with regards to occupational pension funds.”
The Pensions Regulator is the UK’s work-based pension schemes watchdog, while the Pension Protection Fund pays compensation when an employer goes out of business.
Former BHS owner Sir Philip Green has called on Mr Field to resign from the committee.
Mr Field said Sir Philip’s knighthood should be removed if he did not repay £571m to BHS’s pension fund.
Sir Philip said Mr Field should stand down “as he is clearly prejudiced”.
A committee source stressed Mr Field’s remarks were his own personal views.
Sir Philip has agreed to appear before the work and pensions committee and the business, innovation and skills committee to answer questions about the collapse.
Sir Philip has faced criticism about his role but there is no suggestion he did anything illegal.
He bought BHS in 2000 for £200m but sold it to Retail Acquisitions last year for £1.
BHS went into administration last month with debts of £1.3bn, putting 11,000 jobs at risk across 164 stores nationwide.
Source: BBC Business