Calls for mutual insurance to replace UK's MFR
UK – The UK Industrial Society (IS) has called on the government to replace the minimum funding requirement (MFR) with a government backed mutual insurance scheme.
The IS claims that the MFR and its planned replacement are misconceived and that the protection provided to scheme members is inadequate, adding that it is time to start to looking at the needs of the collective rather than the individual across the full spectrum of the pensions system in order to gain economies of scale and sensible pooling of risks.
The IS also believes that the government should reinstate the proposal in the Myners report that would make it obligatory for pension funds to make regular, publicly available reports to Opra on their financial situation.
Moreover, the IS supports Myners’ view that pensions scheme members should be able to call for an independent review of the plan’s finances.
Elsewhere, the IS says it is concerned that the proposals to ensure that employers meet the accrued entitlements of scheme members in the event of a scheme winding up do not mention what might happen if the employer happens to be insolvent.
Says Yvonne Bennion, policy specialist at the IS: “Overall, we consider that the interests of scheme members, as opposed to those of the professionals and employers, are in danger of being too little considered.”