On the go: The Pensions Regulator has written to “hundreds” of defined benefit trustees over disproportionately large dividend payments made by their sponsoring employers, as the watchdog said its interventions are starting to yield results.
Among those who have received letters from the regulator, more than half of those contacted for feedback said this intervention had helped them negotiate larger deficit repair contributions, according to TPR’s latest enforcement bulletin.
Concerns about the equitable treatment of pension scheme members and shareholders have been outlined by both regulators and politicians in recent years. A controversial House of Lords amendment to the pension schemes bill would see trustees and TPR have final approval over any distribution by a public company to its investors.
A regulatory initiative launched by the watchdog to tackle this imbalance forms one of its four key targets, alongside lengthy recovery plans, investment governance and record-keeping.
Mike Birch, TPR’s director of supervision, said: “We are writing to hundreds of trustees to remind them of their duties and make it clear what we expect of them. It is early days but we are seeing encouraging results with a very high proportion of schemes responding positively to our communications, which is driving better outcomes for savers.
“Where we don’t see an appropriate response we are engaging directly with trustees and employers to address scheme risks.”
The regulator also said one trustee board had obtained an additional £15m lump sum from its sponsor, front-loading the schedule of contribution schedule in response to receiving a letter about dividends from the watchdog.
“Communicating directly to large numbers of schemes means we are helping to make pensions safer for savers in all sizes and type of scheme,” Mr Birch said.
