The Work and Pensions Committee continues its inquiry on the defined benefit pensions White Paper, which sets out the Government’s plans for the future of DB pensions in the UK.
Wednesday 18 July 2018, Committee Room 16, Palace of Westminster
- Mark Boyle, Non-Executive Chairman, The Pensions Regulator
- Lesley Titcomb, Chief Executive, The Pensions Regulator
- Anthony Raymond, General Counsel, The Pensions Regulator
- Guy Opperman MP, Minister for Pensions and Financial Inclusion, DWP
- Ronan O’Connor, Deputy Director, Private Pensions Policy, DWP
The Committee has previously criticised TPR’s handling of defined benefit schemes, notably in its joint reports on BHS and Carillion. In the case of Carillion, the Committee expressed doubts about the ability of TPR leadership to bring about the required cultural change. In response TPR has set out its efforts to become a “clearer, quicker and tougher” regulator.
The White Paper adopted the Committee's recommendation of adding punitive fines to TPR's anti-avoidance powers, but whereas in 2016 the Committee proposed “nuclear deterrent” fines that could treble the amount demanded from recalcitrant sponsors—to “focus boardroom minds” on the position of the pension scheme when considering big corporate transactions—the Government has proposed a maximum £1 million fine.
The White Paper also proposes a new criminal offence of "committing wilful or grossly reckless behaviour in relation to a pension scheme"—potentially punishable with a custodial sentence or unlimited fine, although critics have questioned the feasibility of bringing prosecutions.
The questions to TPR and the Minster are likely to focus on TPR’s efforts to toughen its approach and what more it needs to do, whether the proposed new powers go far enough and are workable, and whether the regulatory framework is ready for a new breed of commercial DB consolidators (sometimes known as ‘superfunds’).