Regulator secures millions of pounds for pension savers

30 May 2018

The Pension Regulator’s (TPR) latest quarterly compliance and enforcement bulletin outlines the case of a global company which agreed to pay £3 million into its defined benefit pension scheme after TPR opened an anti-avoidance investigation because of concerns that members’ pensions were being put at risk.

The case study in the bulletin looks at a global company which was the sponsoring employer of a defined benefit scheme with an estimated buy out deficit of £33 million. TPR expressed concerns about the funding position of the scheme and began investigating whether financial support should be provided by the wider group through the use of its anti-avoidance powers. Through negotiation, agreement was reached that the parent company would provide support for the scheme which would significantly improve the funding position and the likelihood members’ benefits would be met in full.

Further details of this case are in TPR’s latest quarterly compliance and enforcement bulletin and the message to employers from TPR is:

“If you engage with us and the trustees of your scheme at an early stage to find a solution, we can achieve a good outcome without the need for us to use our formal powers.”

TPR’s executive director of Frontline Regulation, Nicola Parish, said:

“We are working to be a clearer, quicker and tougher regulator. Very often, being clear that we are fully prepared to use our powers gets employers and trustees to the table and means members are safeguarded more quickly. Several cases are resolved thanks to clear and robust negotiation by our case teams and the early engagement of companies and trustees.”

The Bulletin for January to March 2018 also details the use of TPR’s powers to ensure employers meet their automatic enrolment pension duties. Due to the expected high volume of employers who reached their staging date last autumn, the number of times TPR used its powers in this quarter makes up 20% of all the powers used since the start of automatic enrolment.