By Catherine Lafferty
LONDON — The British government's long-awaited pensions bill gets high marks for effort from observers, but many think it is far from solving the U.K. pensions crisis — which it was intended to do.
The bill is an attempt to grapple with the United Kingdom's pension crisis, which has seen a number of high-profile pension schemes terminated or frozen. But many in the pensions industry aren't sure the bill will do the trick.
Key features of the bill, which was announced earlier this month, include:
-- creating a Pension Protection Fund, which would be modeled on the U.S. Pension Benefit Guaranty Corp.;
-- creating a new pensions regulator, which would replace and have more extensive powers than the current Occupational Pensions Regulatory Authority;
-- replacing the minimum funding requirement with scheme-specific funding; and
-- requiring trustee education on investments.
One of the most debated parts of the bill is the Pension Protection Fund, which would act as a safety net when employers become insolvent and are unable to meet their pension promises. Funding will come from the assets of terminated plans and through levies paid by final-salary and hybrid occupational pension schemes of solvent employers.