The government is drawing up plans for an insurance scheme to protect the pensions of UK workers, according to reports.
Under the plan firms could be forced to take out insurance to protect the value of workers' pensions if the scheme is closed. Commentators predict that an insurance scheme would lead to a fairer distribution of funds to scheme members.
The plans come at a time when many company pension schemes are suffering a deficit. Falling stock markets and an ageing population have combined to leave the pension schemes of the FTSE 100 companies facing a £65bn black hole, according to the Financial Times.
As a result, many employers have closed their schemes to new recruits or wound schemes up.
The government announced its plans for pension reform in a Green Paper last December. In the paper, the government touted the idea of an insurance policy funded by either lower scheme benefits or increased contributions.
The Department for Work and Pensions would not confirm that an insurance scheme is to be introduced.
