The Department for Work and Pensions (DWP) has set out a suite of measures that improve The Pensions Regulator’s (TPR) powers to act against employers who fail to treat schemes fairly.
DWP’s white paper, Protecting Defined Benefit Pension Schemes, includes measures that will strengthen the funding of defined benefit (DB) schemes and improve TPR’s powers to act against employers who fail to treat schemes fairly.
TPR has welcomed the new proposals designed to improve its ability to intervene to protect pension savers.
The regulator said the proposals will support the its ongoing drive, under its TPR Future initiative, to be clearer, quicker and tougher in the way it regulates.
One of the key aspects of the new package is to set greater clarity around the existing funding standards and TPR will now start discussions with stakeholders about how this might work, including how to revise its DB Funding Code of Practice to set out its expectations of trustees and employers.
Lesley Titcomb, chief executive of TPR, said: “We called on government for more effective powers and so we welcome the proposals.
“Planned improvements to our scheme funding, information-gathering and anti-avoidance powers will enable us to be clearer about what we expect from employers in relation to scheme funding and tougher where a scheme is not getting the funding it needs.
“Furthermore, strengthening the notifiable events framework will improve our regulatory grip and will ensure we are sighted sooner on planned transactions that could pose a risk to scheme members.
“We will now work closely with government to develop the White Paper’s proposals, including fines and criminal sanctions, to ensure they are proportionate, act as an effective deterrent and work in practice.
“The best support for a DB scheme is a strong employer and we believe the current flexible funding framework, which allows employers to balance growth with meeting pension benefits, remains the right approach and we will aim to retain this flexibility in any new approach.”