The government is aiming to increase protection for people whose company pension schemes become involved in a buyout.
Minister for pensions reform Mike O’Brien said the Pensions Regulator will gain additional powers to force companies that buy companies and their pension schemes to put in enough money to protect members’ interests.
O’Brien said he was concerned that some emerging business models did not provide the same protection for pension schemes as before.
“The most effective way to tackle this problem is to give the regulator the power to require contributions to pension schemes when an employer’s actions reduce the security of members’ benefits. I want to see pensions secure and promises kept so that members can look forward to a happy retirement,” he said.
O’Brien added that the powers would only be targeted at risky situations to avoid putting onerous burdens on employers. The vast majority of pension schemes would not be affected.
Derek Simpson, joint general secretary of Unite trade union, said: “These are precisely the sort of protections Unite has been campaigning for. These measures will provide extra safeguards for occupational pension scheme members and their pension savings.”
There will be an eight-week consultation process on the changes.