RSM welcomes PLSA proposals for Defined Benefit schemes

Commenting on the report issued by the Pensions and Lifetime Savings Association (PLSA) on the options for tackling the challenges of underfunded defined benefit pension schemes, Donald Fleming, covenant assessment partner at RSM said:

'The PLSA has put forward a serious and constructive proposal which seeks to provide a new solution for underperforming companies struggling to fund their defined benefit pension schemes. 

'Establishing superfunds could bring significant benefits to sponsoring employers weighed down by pensions liabilities - particularly those in the manufacturing sector -  and provide additional security for their pension scheme members.

'However, careful assessment will be required to ensure that the superfund model will succeed in improving the security of member benefits while incentivising employers to provide tangible funding.'