Employers have criticised the Pensions Regulator for being too heavy handed and lacking clarity in its guidance on the management of corporate pension schemes.
During a panel debate, chaired by Jeff Prestidge from the Mail on Sunday, at the National Association of Pension Funds (NAPF) conference, Nigel Labram, chief executive officer of the BT pension scheme, said the Regulator’s lack of transparency put pension schemes at risk. The Pensions Regulator has expressed concerns over the recovery plan drawn up for BT’s defined benefit (DB) scheme, which has a £9 million deficit.
Labram said: “If decisions are made about a [pension scheme] without the facts [it] could cause sponsors to shut schemes they could have otherwise afforded. Until there is a change in the law, surely we should follow the law as it stands and not be forced to anticipate changes.”
Labram added the Regulator should take account of the fact employers have multiple obligations, including those to stakeholders, staff and pensioners as opposed to viewing the pension obligation in isolation.
Meanwhile, Steven Robson from United Utilities argued the Pensions Regulator should only get involved if there is a specific problem with a pension scheme. “It should be a referee but only when it is asked. Or it should be refereeing when it is clear there is a problem.”
Adam Walker, chair of the NAPF Liverpool Local Group, agreed the Regulator should adopt a “lighter touch. There is a bit of wastage and red tape.”
The issue of enhanced transfer values is one such example. Robson said the Regulator should allow employees to make decisions about enhanced transfer values. The Regulator’s guidance should focus on ensuring employers make sure members fully understand the consequences of taking an enhanced transfer value, he said.
“A lot of the time if you give the [pension scheme] member the information they can make a sensible decision. If you explain what the risks are people can make a decision without financial advice.”
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