Looks at the Pensions Regulator's powers to protect pension scheme benefits and measures to strengthen them in the Pension Schemes Bill (HL} 2019/20Jump to full report >>
The Pensions Regulator (TPR) has ‘anti-avoidance’ powers which it can use with the aim of protecting benefits in defined benefit (DB) pension schemes (i.e. schemes which provide benefits based on salary and length of service) and the Pension Protection Fund.
The Regulator’s two main ‘anti-avoidance’ powers are to issue:
A clearance procedure is available for those wishing confirmation that they will not be subject to such powers when dealing with events that may impact upon their pension scheme, such as a business transaction.
In its December 2016 report on DB schemes, the Work and Pensions Select Committee recommended that reforms should enable TPR to intervene sooner when difficulties become apparent. It recommended that the Government should consult on new rules for situations where TPR clearance of major corporate transactions would be mandatory and that TPR should be able to impose punitive fines that could treble the amount payable under TPR’s existing anti-avoidance powers (press release, 21 December 2016).
In its February 2017 Green Paper, Security and Sustainability in Defined Benefit Pension Schemes, the Government said that the “overarching view of virtually all stakeholders is that the regulatory regime for DB pensions is satisfactory” but that there might be a case for “limited changes to the regulation of DB provision to help employers and trustees manage liabilities more effectively in some of the circumstances that exist” (para 139-40). It asked for views on reforms that had been suggested, including:
In its March 2018 White Paper, the Government said it would strengthen the regulatory framework and the Regulator’s powers to:
A further consultation on Protecting DB pension schemes – a stronger Pensions Regulator was published in June 2018, with a government response in February 2019.
Part 3 of the Pension Schemes Bill [HL] 2019-20 published on 15 October contained provisions that would improve TPR’s powers to enable it to:
However, the general election intervened, and the Bill proceeded no further.
For more on the White Paper proposals more generally, see CBP-8219