From the blog: The white paper on protecting defined benefit schemes will go under the spotlight on Wednesday with both the Pensions Regulator and pensions minister giving oral evidence to the Work and Pensions Committee as part of its inquiry.
One key proposal – to be discussed during tomorrow’s hearing – is the strengthening of the regulatory framework and giving the regulator greater enforcement and information gathering powers.
This could help avoid or mitigate situations like that of Carillion and BHS, and would be a very positive step forward.
Since its publication in March, the white paper has been the cause of a great deal of discussion; both within government and the pensions sector.
At the time it avoided proposing some potential headline-creating alterations, but the areas for change and consultation that were set out will be key to ensuring most members of DB schemes see their benefits paid in full.
We believe increasing the regulator’s scope to impose significant fines, improving the notifiable events regime, as well as introducing an increased oversight regime, will help safeguard savers’ pensions
One key proposal – to be discussed during tomorrow’s hearing – is the strengthening of the regulatory framework and giving the regulator greater enforcement and information gathering powers.
This could help avoid or mitigate situations like that of Carillion and BHS, and would be a very positive step forward.
There is also a Department for Work and Pensions consultation – open until mid-August – which proposes giving the pensions watchdog more bite.
Change already under way
This is a move very much welcomed by the Pensions and Lifetime Savings Association, as we believe increasing the regulator’s scope to impose significant fines, improving the notifiable events regime, as well as introducing an increased oversight regime, will help safeguard savers’ pensions.
We have said before that the regulator plays a vital role in the UK pensions industry, both setting standards and stamping out poor behaviour.
It is therefore crucial that it has the powers it needs to be able to step in, take action, and protect savers. A great deal of work has taken place over the past 18 months by the leadership at the regulator in the form of the ambitious TPR Future Programme.
This programme is designed to change the regulator’s culture and focus, which is already being felt on the ground and will bear fruit over the long term.
It is also pleasing to see the government consulting on reforms the PLSA has proposed, such as ensuring all DB schemes have a chair of trustees and introducing a DB chair’s statement.
We will be responding to the consultation to ensure our views are heard and to try to protect the many savers who are reliant on DB schemes.
Act quickly to enable safe consolidation
Another proposal from the white paper we are keen to see the government take forward before the end of the year is its plan to develop a new legislative regime for scheme consolidation.
There is a growing body of evidence that consolidation, in many forms, could help some schemes.
But there is still much to do to build the framework that could make that happen safely. Given the emergence of new providers, it is important that a robust legislative regime is put in place sooner rather than later.
At the heart of this work, we have to remember that more than 11m people rely on DB pensions for their retirement income and need to be able to do so with confidence. If changes are implemented properly then they could go a long way to help the sector be fit for the future.
Joe Dabrowski is head of governance and investment at the Pensions and Lifetime Savings Association.
