Asked by: Sureena Brackenridge (Labour - Wolverhampton North East)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what protections exist for pensioners in the case of scheme buyouts.
Answered by Torsten Bell - Parliamentary Secretary (HM Treasury)
Insurance buyout is a long-established way of defined benefit pension schemes securing members’ full pensions. Members are guaranteed to receive their full pension from an insurer, backed by a rigorous capital adequacy regime and underpinned by 100 per cent compensation from the Financial Services Compensation Scheme.
Trustees have a fiduciary duty to act in the best interests of the members and must be satisfied that transferring the liabilities of the scheme to an insurer is in the best interests of the members before the transfer can take place.