Call for written submissions
The Committee invites written submissions addressing one or more of the following issues.
Defined benefit (DB) pensions regulation by the Pensions Regulator (TPR), including:
- the adequacy of regulatory powers, including anti-avoidance provisions
- the application of those powers, including in specific cases other than BHS
- the level and prioritisation of resources
- whether a greater emphasis on supervision and pro-active regulation would be appropriate
- whether specific additional measures for private companies or companies with complex and multi-national group structures are required
- the pre-clearance system, including whether it is adequate for particular transactions including the disposal of companies with DB schemes
- powers relating to scheme recovery plans
- the impact of the TPR's regulatory approach on commercial decision-making and the operation of employers
The Pension Protection Fund (PPF), including:
- the sustainability of the Pension Protection Fund
- the fairness of the PPF levy system and its impact on businesses and scheme members
The role and powers of pension scheme trustees
Relationships between TPR, PPF, trustees and sponsoring employers
The balance between meeting pension obligations and ensuring the ongoing viability of sponsoring employers, including:
- TPR's objective to "minimise any adverse impact on the sustainable growth of an employer"
- whether the current framework is generating inter-generationally fair outcomes
- whether the current wider environment, including very low interest rates, warrants an exceptional approach
In each instance, recommendations of potential improvements are particularly welcome.
Submit your views through the Pension Protection Fund and Pensions Regulator inquiry page.
Deadline for written submissions is Friday 23 September 2016.
The Work and Pensions Committee recently reported on BHS, including its defined benefit pension funds. In that Report, the Committee set out its plans for its ongoing inquiry:
"The future of occupational pension schemes is perhaps the greatest challenge facing longstanding British businesses. In an environment of rising longevity, interest rates close to zero and intense international competition, defined benefit pension liabilities accumulated in a different age can appear burdensome and unaffordable. It should not be forgotten that these liabilities are promises of deferred pay to employees. It is imperative that the regulatory framework does not allow sponsor companies to evade those responsibilities and, in doing so, pass the burden onto other schemes that pay the PPF levy.
There may be a case for stronger and more proactive regulation. It is equally important, however, that a balance is found to enable otherwise viable companies to continue to operate. The jobs of those currently in employment are inevitably in some competition with the pension entitlements of their forebears. Investigating how to secure a fair and sustainable settlement will be at the centre of the Work and Pensions Committee’s ongoing inquiry."
Rt Hon Frank Field MP, Chair of the Committee, said:
"The lessons of BHS must be learnt. This may mean strengthening the powers and resolve of the Pensions Regulator to act early, quickly and firmly with those who seek to avoid their pension responsibilities. It is important, however, that businesses that are run reputably and responsibly are not put under undue restriction. Ultimately, defined benefit schemes must be placed on a sustainable footing."