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Woolworths pension head slams UK regulation

UK - Elisabeth Browning, group pensions manager at the £300m (€438m) Woolworths group pension scheme, has attacked UK pension regulation, calling it "crippling" and "confusing" for members.

Speaking at the European Federation for Retirement Provision's (EFRP) conference about public and private approaches to retirement provision, she argued that more ways to calculate deficits and accounting standards such as IAS19 and 34 are driving up costs and eroding defined benefit (DB) schemes.

This is making it increasingly hard to continue providing a DB scheme to members, she said, adding: "We have a strong equity base, we are not following the herd LDI-wise, but legislation is not helping."

"We are being crippled into the fact that there will be a point when we cannot sustain this anymore, because of the sheer costs due to the legislative requirements, particularly due to IAS19 and 34," she argued, saying that "this is not acceptable," and that "it adds to confusion to members".

Reg Hinkley, chief executive of the pension trustees of the BP pension scheme, also gave his views on pressures on DB schemes in the UK at the conference.

"There has been an enormous amount of change in a short time", he said, comparing UK pension provision to "boiling a frog".

According to Hinkley real costs for companies have grown substantially: apart from the increased liability costs, he agreed with Browning that administration and regulatory costs have grown steeply in the past ten years.

Due to this, pressures on trustees have increased, and they are not only a regulatory body anymore, but also financial stewards.

Nonetheless, he declared that BP will "probably stick with the [DB] scheme for the foreseeable future".

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