The NAPF's submission to the pension law review being conducted by Professor Roy Goode restricts the proposed compensation to covering fraud, theft and criminal negligence. This would no longer offer protection to members of pension schemes that were underfunded.
Brian Matthews, finance director of the Electricity Supply Pension Scheme, which threatened to resign from the NAPF over the earlier proposal, said the change went 80 per cent of the way to meeting its objections. But the ESPS is still unhappy with the proposed funding for compensation.
The NAPF's other proposals included an annual solvency test to ensure pension funds can meet their commitments on winding up, and a tribunal to settle disputes between trustees and employers.
It also wants a strengthened Occupational Pensions Board as the main regulator and an agreed funding policy for the scheme to be disclosed to members.
Meanwhile the Society of Pension Consultants has proposed a compensation scheme, funded through the Government's National Insurance Fund, which would cover underfunding.
The scheme would seek to ensure employees received the pension rights that should be clearly set out in their conditions of employment.Reuse content