The Pensions Regulator has published new guidance and consultation reports covering the three areas of multi-employer schemes and employer departures; monitoring employer support, and incentive exercises.
The multi-employer schemes and employer departures guidance aims to help trustees and employers of multi-employer schemes understand the different mechanisms by which an employer can depart from the scheme.
Monitoring employer support is for trustees and managers of all occupational pensions schemes with a defined benefit (DB) element and sets out practice that the Pensions Regulator expects trustees to follow in assessing, monitoring and taking action on employer covenant.
Meanwhile, the guidance on incentive exercises sets out principles which will enable employers and trustees to consider the risks associated with transferring benefits out of DB schemes, or modifying benefits.
Pensions Regulator chair David Norgrove said: “Offers involving cash incentives is likely to result in less objective decision-making. It can be extremely difficult for a member to weigh up whether giving up a DB pension promise in exchange for a cash transfer into a DC scheme will be in their interests in the long-term.
“Members must evaluate the strength of the offer in the context of the benefits they are giving up and the risks that are being transferred to them. Given the gravity of the decision, the difficult financial equation, and potential for detriment if they get the decision wrong, we believe our stance is reasonable and proportionate.”
The Pensions Regulator has also published a report, Recovery plans: assumptions and triggers, which sets out an analysis of recovery plans received up to 31 August 2010 from DB Pension Protection Fund eligible schemes that were in deficit at their valuation.
Read more articles on occupational pension schemes
