A Tory peer believes European Union (EU) pensions legislation will “fall away” when Brexit materialises and argues London has a bright future.
Lord Howard Flight (pictured), a politician with strong ties to the City of London, made the remark at the Association of Member Nominated Trustees' (AMNT) autumn conference on 21 September.
He believes legislation for example around guaranteed minimum pension (GMP) equalisation and funding of defined benefit (DB) schemes to buyout level will not be implemented.
He said: "I happen to think those will fall away because it seems to me to be completely crazy for us to implement a regime which was then going to be unwound a few months later. My expectation is we won't implement them."
The main benefit of leaving the EU would be a financial one for DB schemes as "increasing material deficits further" through potential full funding requirements is "not really in line with UK thinking on the matter", he added.
On the matter of DB accounting standards, Flight criticised the current methodology.
"The accounting standard is completely barking. It is completely crazy to use a rate of interest which is a function of false bond yields and excessive quantitative easing money creation. It is complete nonsense. A reasonable approach is to look at what the portfolios have done and what returns have been over a period of time."
Regarding the future of the City of London following the UK's decision to leave the EU, Flight was bullishly optimistic.
"London freed-up can attract a lot more business internationally. From a near term perspective, equivalency passporting is going to be the route, which deals with most of the access issues. My vision of London is what I call a super Singapore to be a truly low tax, low cost financial capital, which it is today and I think it will remain."
Professional Pensions 21/09/16