Why so many fall through pensions loophole

THE Pensions Board has been busy lately encouraging employees to get into pension schemes. However, the board does little to protect the earned entitlements of those who have taken their advice.

As everyone knows, investment values can go up and down. Furthermore the adequacy of a pension fund depends on two unknown factors: the future investment return on scheme funds and members’ longevity.

There is a loophole under section 48 of the Pensions Act that allows employers to withdraw funds from defined benefit schemes if they feel the funding is ‘surplus’ to requirements.