MPs cautious over pension reform

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THE House of Commons' Social Security Committee has given only qualified backing to the enormous reform of pension law proposed last year by the Goode Report.

The Pension Law Review Committee, set up in the wake of the Maxwell scandal and chaired by Professor Roy Goode, made 218 recommendations.

MPs on the Social Security Committee feared that full implementation would require 'sheaves' of new regulations, discouraging employers from running occupational pension schemes for their workforces.

In a report issued yesterday, the MPs called for a more tightly focused pensions Bill to implement a watered-down version of the Goode proposals. Only in its call for independent custodians to safeguard pension scheme assets does the MPs' report go significantly beyond the Goode report.

The MPs regard a new and powerful pensions regulator as pivotal. They also support the Goode recommendation for a compensation scheme to protect against fraud, theft and other misappropriation.

But the proposed minimum solvency standard could bring about the winding-up of many pension schemes, the social security committee believes. It recommends a more flexible approach, without the threat that employers might have to make substantial injections of money at short notice.

The report says larger pension schemes should be required to appoint one-third of their trustees from among the members but is happy for this change to be introduced 'over time'.