PLSA AC 18: TPR must ‘get the balance right’ on excessive dividend payments

Written by Theo Andrew
18/10/18

The Pensions Regulator must “get the balance right” when writing to schemes over their dividend payments, its chief executive has said.

Speaking at the Pensions and Lifetime Savings Association annual conference today, 18 October, Lesley Titcomb reiterated that it will not be implementing a deficit recovery contribution to dividend ratio but that it will be ensuring that schemes “get their fair share”.

TPR announced last month that it will be targeting 50 schemes that it will “probe” over “excessive” payments.

Titcomb said: “Let’s be clear, that doesn’t mean no dividends because we recognise that shareholders have and investors have earned a return and there are businesses that will want to attract investment into their business, but what we want to ensure is that the pension scheme gets a fair share.

TPR said it will be setting out examples of what is expected in its funding code, as well as picking up points laid out in the government's defined benefit white paper.

“Does that mean we will be meeting a single dividend to DRC ratio? No it does not, what we’ll be talking about is the factors that should be taken into consideration and what normal range looks like.

"We’ll be asking schemes who fall lot of the normal range to explain to us why that is and we have to decide whether we will accept that explanation or not,” she said.

According to the regulator, it will also be consulting with the industry to help develop an acceptable code.

Speaking at the Pensions Age autumn conference last month, TPR’s lead investment consultant Fred Berry said that schemes will be contacted in the run up to their triennial valuations in order to catch them at a key point in their cycle.

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