Easing of MFR proposals welcomed by advisers

UK – The calls for the government as part of its minimum funding requirement (MFR) reform to introduce transitional measures to ease the burden of the current system have been heeded, says international consultants Watson Wyatt (WW).

According to WW, the government’s recently published consultation document proposing changes means that schemes that are 100% funded according to MFR will no longer have to get an annual certification from the scheme actuary regarding the contribution level and that the periods over which an MFR deficiency has to be corrected should be extended.

The consultation paper also provides for greater protection for scheme members in the event of voluntary winding-up if the employer is still solvent, says WW.

The London based Society of Pension Consultants (SPC), agrees that extending the MFR deficit correction period will help employers. SPC’s president Jane Samsworth says: “We warmly welcome the proposal to extend the periods for correcting MFR deficits, as it will give breathing space to employers struggling with current time limits.”

SPC also supports the measure to remove the annual re-certification for schemes that are fully funded on the MFR basis.

The SPC is the representative body for the providers of advice and services needed to set up and run occupational and personal pension schemes. Its 134 members collectively employ some 14,000 staff, providing pension related services and advice.