PENSION scheme reforms being mooted by the European Union could wipe out all pension provision in the UK – not just the defined benefit schemes currently struggling to stay open, accounting group PwC said yesterday.
PwC estimates that the plans, which would force pension schemes to hold solvency capital in the same way as banks, would cost businesses £250-500bn and make it too expensive for firms to run a scheme for their employees.
“In terms of the impact on the UK economy this is like wiping out a quarter of the FTSE 100,” said Raj Mody, head of PwC’s pensions group.
“While attempting to improve pension scheme security, these new rules could actually kill off occupational pension schemes altogether.”
Separately, the National Association of Pension Funds said the new rules would cost businesses £300bn and have “the opposite effect” from making schemes more secure.