'Oversharing' is good. A scheme guide for dealing with the regulator

But on the right, in the US anti-'big government' movement, and in the UK with the continual discussion of European Union membership, regulation is seen as a drag preventing once-leading economies to regain their former glory.

The pensions industry is similarly split on the contribution made by the Pensions Regulator, which was brought in with the entire scheme funding framework under the Pensions Act 2004.

Some see the body as irrelevant for those schemes that have always been governed well, another hoop through which to jump, and important only for that rump of often smaller schemes that have never been run well.

Others see it as bringing a necessary level of rigour to scheme management and have welcomed in recent years a more nuanced, individualist approach to scheme problems, rather than the more austere face of its early days.

"More recently we have seen a much more proactive stance from the regulator, and a much more balanced stance," said Giles Payne, director at professional trustee company HR Trustees. "This is now much more, 'let's try and make this work'."

Keeping on good terms

Governance experts observe that the crux of a positive relationship with the regulatory authorities is the same as in any relationship: openness and honesty.

"The regulator is like any normal person... they don't like feeling like things are being hidden from them," added Payne.

Industry practitioners tell many stories of when things have gone wrong, particularly in the discovery of past problems where management has slipped below the standards set by the watchdog.

Allan Course, a client director at professional trustee company Capital Cranfield, said the company's strategy "is to err on the safe side when reporting into the regulator".

Err on the safe side when reporting into the regulator

Allan Course, Capital Cranfield

When one of his clients found it had missed some historical deadlines on transfer value requests, the scheme's first step was to approach the regulator to highlight the breaches, even though the trustees were not duty-bound to report them.

"What we received was an email from the case handler," he recalled, saying the regulator was not going to take further action.

It is this human side of the relationship that comes up again and again.

Helen Forrest, head of policy and advocacy at the National Association of Pension Funds, said there was an opportunity for schemes to build up this relationship through "pre-emptive cases".

This is when the regulator might place a case worker, especially a person looking to train up on a certain topic, into a particular scheme to view a valuation, or a covenant assessment, from the inside. But she added: "You have got to be confident enough that you are happy with your processes."

The regulator's defined benefit enforcement policy, published most recently in June, outlines its approach to proactive engagement, which it says means that "all parties are able to discuss and address any issues in real time before the valuation is completed".

Another important issue is where managers are looking to move on from a tricky history between the employer and regulator over the funding of the scheme, where trustees can sometimes be playing the role of moderator.

"We have to be absolutely straight up with them," said Payne, adding that once the regulator is assured that the right controls are in place, trust will return.

"It is dealing with the concerns from each side and making sure that we move forward positively with the scheme."