The green paper, Security and sustainability in defined benefit pension schemes, poses consultation questions around four key areas: employer contributions and affordability; member protection; consolidation of DB schemes; funding and investment. It will also consider strengthening the powers of The Pensions Regulator (TPR), and how to strike the right balance between the needs of pension scheme members, sponsoring employers, and the Pension Protection Fund (PPF).

The consultation seeks views on whether there is a case for making special arrangements for pension schemes and sponsors in certain circumstances, such as increased flexibilities for stressed sponsors or a different regime for employers which can afford to pay more. This includes measures to encourage employers with significant resources and DB deficits to repair those deficits more quickly, and if there are any circumstances in which employers could renegotiate DB pensions and reduce accrued benefits.

The consultation also asks whether the government should encourage, incentivise or mandate the consolidation of smaller DB schemes into larger vehicles to reduce risk, whether more should be done to help members understand the funding position of their pension scheme, and whether there are adequate investment options available on the market.

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