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Pensions Regulator's competence called into question by Parliament

Chris Hamblin, Editor, London, 19 August 2016

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The House of Commons Work and Pensions Select Committee is to review defined benefit pensions regulation by the Pensions Regulator.

The committee is inviting written submissions on one or more of the following topics.

1. Defined benefit pensions regulation by the Pensions Regulator, including:

  • the adequacy of regulatory powers, including anti-avoidance provisions;
  • the way in which the regulator uses those powers, especially in specific cases other than that of BHS (whose pension scheme had a £571 million hole in it when it collapsed, which was far higher than the retail giant's own market value);
  • the level and prioritisation of resources;
  • whether a greater emphasis on supervision and pro-active regulation would be appropriate;
  • whether specific additional measures for private companies or companies with complex and multi-national group structures are required;
  • the pre-clearance system, especially whether it is adequate for particular transactions including the disposal of companies with defined benefit schemes
  • powers relating to scheme recovery plans; and
  • the effect of the regulator's approach to commercial decision-making and the operation of employers.

2. The Pension Protection Fund (PPF), including:

  • the sustainability of the Pension Protection Fund; and
  • the fairness of the PPF levy system and its impact on businesses and scheme members.

3. The work and powers of pension scheme trustees.

4. Relationships between TPR, PPF, trustees and sponsoring employers.

5. The balance between meeting pension obligations and ensuring the ongoing viability of sponsoring employers, including:

  • the Pension Regulator's objective to "minimise any adverse impact on the sustainable growth of an employer;"
  • whether the current set of rules is generating inter-generationally fair results; and
  • whether today's wider environment, which includes very low interest rates, warrants an exceptional approach.

In each instance, recommendations of potential improvements are particularly welcome.

 

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