Following the details released yesterday by Andrew Smith, and the general media coverage regarding the changes to pensions, including how solvent companies will have to meet their pensions promises in full, Mike Fosberry, Head of Pensions and Financial Planning at Smith & Williamson, said: “Andrew Smith’s proposed pension reforms will provide greater protection for members of defined benefit pension schemes but following on from the ill fated Pensions Act 1995 they could herald the final nail in the coffin for such schemes.
“Companies with defined benefit schemes will be looking very closely at their options now bearing in mind it will be more expensive to wind up schemes in the future. If they are looking to reduce liabilities options such as closing schemes to new members will certainly be on the agenda. The net result is that the reforms will reduce pension provision by employers at a time when Andrew Smith should be doing everything in his power to encourage their participation. Legislation to be effective should be practical with an understanding of all the potential knock on effects. These reforms smack of spin in the one area where it is least needed.” Smith & Williamson is an independent professional and financial services group employing over 1,100 people. The group is a leading provider of investment management, financial advisory and accountancy services to private clients, professional practices and mid-size corporates. It operates from offices in London, Belfast, Bristol, Guildford, Leamington Spa, Salisbury, Southampton, Tunbridge Wells and Worcester.