The Pensions Regulator

Regulator welcomes Government consultation on amended powers

Ref: PN08-10
25 April 2008

The Pensions Regulator welcomes today’s Government consultation document, and has published a statement on the use of the amended powers.

The proposed amendments hone the powers that the regulator has had since April 2005, to ensure they remain relevant in an evolving pensions landscape. They will help us to ensure adequate protection is in place so that members’ benefits and the Pension Protection Fund are not put at risk. However, we believe these changes will affect only a small number of schemes, and seek to reassure the industry that we do not wish to hamper market activity or innovation.

Tony Hobman, Pensions Regulator chief executive, said: “We look forward to working with the Department for Work and Pensions and stakeholders as the legislation is developed. Our record demonstrates that we are both pragmatic and proportionate and our actions to date have proven that while we will use our powers where needed, this remains a last resort.

“We envisage no change to our fundamental approach as a result of the new powers.  Significant checks and balances are already in place, ensuring that our powers are used only when appropriate and that parties have opportunities to challenge our decisions."

Editor's notes

1. View the Pensions Regulator's statement on the use of the amended powers
2. To view the DWP consultation document visit: http://www.dwp.gov.uk/.
3. 'Clearance' is the term used to describe the voluntary process of obtaining a clearance statement from the Pensions Regulator. A clearance statement gives assurance that, based on the information provided, the regulator will not use its anti-avoidance powers to issue, to the applicants for clearance, either contribution notices or financial support directions in relation to a defined benefit occupational pension scheme and a particular event. Events include transactions, agreements, decisions, other acts and failures to act.
4. A contribution notice requires payment of a specified sum to be paid into a defined benefit scheme. A financial support direction requires financial support to be put in place for the scheme. These powers have been in place since April 2005.
5. The Pensions Regulator Determinations Panel is the decision making body of the regulator. Where the regulator wishes to exercise its powers it is required to provide a submission to the panel. A decision is made by the panel as to whether the use of the power is appropriate and a determination notice is used setting out the reasons for the decision. The regulator website provides more information on the panel and the determinations process.
6. The Pensions Regulator is the regulator of work-based pension schemes in the UK, with objectives to protect members' benefits, promote good administration and reduce the risk of calls on the Pension Protection Fund. Our approach is risk-based focusing on education and enablement, with enforcement where appropriate. We have the ability to:
   • collect information about pension schemes; through scheme returns, under the scheme funding regime and as well as statutory (including whistleblowing) reports;
   • issue notices requiring actions to tackle non-compliance, prohibit trustees who are judged not fit and proper to carry out their duties or appoint independent trustees;
   • direct pension schemes as to how to calculate their liabilities and the contributions required;
   • issue a contribution notice where there is a deliberate attempt to avoid liabilities, or a financial support direction where the employer is a service company or insufficiently resourced.