A consultation has been launched on granting stronger powers to The Pensions Regulator (TPR) as the government seeks to address “misuse” of flexibilities in the defined benefit (DB) funding system.
The Department for Work and Pensions (DWP) has today (26 June) issued a call for industry views on enhanced regulatory powers, including punitive powers where intentional damage is done to a DB scheme, greater information-gathering powers for TPR, and a strengthened clearance regime.
The consultation comes after the DWP published its long-awaited white paper – Protecting Defined Benefit Pension Schemes – in March, outlining strengthened regulation and criminal sanctions, among other policies.
Launching the consultation at the 2018 Pensions and Benefits UK conference, run by PA’s sister publication Professional Pensions, pensions and financial inclusion minister Guy Opperman urged the industry to submit its views to ensure the policy is fit for purpose.
“We this morning launched our consultation on TPR powers which will run until 21 August this year,” he said. “This provides more specific information on the policy proposals. I hope that you all share your views as these will help to inform our policy proposals.”
Opperman added the government would consult on an authorisation regime for new models of DB consolidators and an accreditation regime for existing DB consolidators later this year, while TPR would issue a consolidation on its DB funding code of practice next year.
He continued: “The reality of the situation is that we cannot do this without you. I accept that change is coming and all change is something that has to be wrestled with and dealt with but I want this to be something that we consult with yourselves on. Where you feel that we need to tweak or change legislation, we will listen.
“I want us to be in a situation where we consult you properly and listen, and we come back to you with the right solution.”
The consultation is open for responses until 21 August.
‘Major step forward’
TPR described the consultation as a “major step forward”, with a spokesperson for the watchdog adding: “We welcome the package of measures outlined in the consultation which supports the actions we are already taking to protect pension savers by being clearer, quicker and tougher.
“The proposal to enable us to apply a range of sanctions, from administrative penalties to high level fines and criminal charges, for different types of breaches, will provide TPR with a more flexible enforcement framework. It will also help act as a strong deterrent against risky and reckless behaviour which threatens the retirement incomes of workers.
“These measures, together with greater transparency for trustees and TPR over the potential detrimental impact of corporate transactions on pension schemes and improvements to our anti-avoidance powers, are a major step forward in the protection of members.”