Great Britain to grant companies greater access to pension systems

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Sir Keir Starrer will promise on Tuesday to unlock some of the 160 billion GBP of surpluses in the company’s pension programs for companies in order to increase money to the British economy and increase growth.

The British Prime Minister will tell an audience of managers in the city of London pension Surpluses are loosened, a step that is praised by the former conservative chancellor Jeremy Hunt.

RigidThe decision is intended to advance investments by companies and also encourage them to take more risk in their pension investment strategies. “Today’s changes will unlock billions for investments,” said Starrer.

The government estimates that around 3,750 corporate benefits pension programs in excess assets of 160 billion GBP have the payments that they have to owe their members. Less than 70 billion GBP can be returned to companies in accordance with the applicable rules. The total assets in the system are £ 1.2TN.

“This reform has the potential, the way in which employers look at their defined benefit pension systems, the BT pension scheme, the largest in the FTSE 100. BT scheme is in the deficit.

After several weeks in which Chancellor Rachel Reeves has made a number of growth -related announcements, Starrer’s step will be an answer to critics on Tuesday that he has taken a back seat in the economy.

“In order to achieve the change, our needs of our country requires nothing less than the re -wiring of our economy,” Starrer will tell the bosses of Lloyds, nationwide and Tesco together with other managers. “Creative reforms are needed, the removal of hurdles and relentless focus.”

The pension reforms follow the criticism of some managing directors that Starer and Reeves have undermined growth with a budget tax of 40 billion GBP, a thicket of new employment laws and dark rhetoric.

In his speech from 2023 Mansion House, Hunt hovered the defined pension reforms of the defined food, but it was no longer time to satisfy them before last year’s elections, brought Sarmhermer and work to power.

“Perhaps I have my political differences with Rachel Reeves in relation to business tax increases, but afterwards I welcome the dynamics that she put behind the reforms of the Mansion House,” said Hunt of Financial Times.

As part of Labor’s plans, DB systems could change their rules to enable surpluses if the employer and the trustees of the pension program agree. The plans would require laws.

At the moment, the DB scheme surplus can only access if the plans have passed a decision to maintain power by 2016 according to a law of 2004 adopted by the last Labor government. Some programs had major deficits and have not passed such decisions.

Surpluses are only accessible if you exceed the level required for a company to sell your system to an insurer. The British pension protection fund estimates that 68 billion GBP of the 160 billion GBP corresponds to this threshold of the entire current surplus.

According to the state estimates in the previous year, around 180 million GBP were accessed by companies between 2018 and 2023. Companies are taxed to 25 percent over surpluses that they receive.

The funding level for the pension system has improved dramatically in recent years, since higher income from state bonds have increased the expected assets and thus reduce the current accounting value of future liabilities.

Pension monitoring welcomed the government’s announcement, provided that the results of the members were protected.

“All trustees really take care of paying the members of the program, but as a general topic we would support the publication of surpluses under the right circumstances,” said Vassos Vassou, member of the association of the association of professional pension troops.

He found that companies with large surpluses in their pension systems have decided in recent years to sell them to insurance companies in Tulk -Annuity transactions with the name Buyouts. In the past two years, around 50 billion pension obligations have been sold in the past two years.

Some consultants are skeptical that many companies will use Labor’s reforms. “I just don’t think there will be a lot of people who want to do it – either they want to make a buyout or simply bring more money into the program until they can,” said John Ralfe, an independent pension consultant. He found that the 25 percent tax was levied on cash that was extracted from pension surpluses.

On Monday, Reeves asked the Labor deputies to move for the growth strategy, with some backbenchers being nervous that the party harms its environmental information information and that business interests are about the interests of consumers.

“If we understand the right – and I know that we are doing it – the price offered is immense,” she told the parliamentary Labor Party. Reeves, who was criticized by Business for the fact that he was apparently talking about the economy, asked the Labor deputies to be positive. “Now is the chance for us to call this potential and the better future,” she said.

She added: “In the past six months as a chancellor, my experience is that the government is used to saying” no “. That has to change. We have to start saying “yes”. “