The Pensions Regulator has asked for greater powers to protect workers and final salary pension schemes when companies are sold.

Following its letter to the Work and Pensions Committee on 24 June this year, TPR has responded to the committee’s call for evidence on DB pensions and has said it is looking to engage fully with the inquiry in the weeks ahead.

In the aftermath of the BHS pensions crisis earlier this year, the inquiry is considering ways to safeguard similar pension scheme collapses from occurring.

TPR CEO Lesley Titcomb has suggested that firms with large pension deficits should be required to inform the regulator if a sale is taking place and it should be permitted to interject where necessary. At present, however, businesses are not obliged to notify TPR of a sale.

As it stands, the regulator can only intervene once a sale has been processed. The body is then able to use its anti-avoidance powers to seek compensation if it appears that the purpose of the sale was to scrap or lessen the pension deficit.

“We believe there is merit in government and parliament considering potential improvements to the legislative and regulatory framework, including the operation of TPR’s powers,” the regulator said in its evidence to the Committee.

Furthermore, the regulatory body has pointed out key ways in which it believes the current legislative framework could be improved. These include: an evolution of TPR’s operation approach to focus more intensely on schemes at greatest risk, enhanced information-gathering and investigatory powers, greater flexibility over valuation periods, clarifying TPR’s scheme funding powers so that it can specify an appropriate level of funding and contributions and mandatory clearance in a targeted set of circumstances where corporate activity may pose a material risk to a scheme.

A spokesperson for The Pensions Regulator said: “Our submission to the Work & Pensions Select Committee sets out a number of ways where we feel the regulatory framework could be strengthened in areas such as clearance on corporate actions and information gathering. We look forward to giving evidence to the inquiry to elaborate on these proposals in more detail in the coming weeks.”

"We may need new powers in certain situations. For example, where a company is being sold and the scheme is significantly underfunded, then it may be appropriate for the regulator to be told in advance about the transaction, and it may be appropriate for us to have the power to intervene in some way, which we don't have at the moment,” Titcomb told the BBC.

"There's no requirement to tell us. There's no requirement to come to us for clearance and we have no power to intervene if people do.”

The Work and Pensions Committee chair, Frank Field added: "I would be surprised if the select committee doesn't move to a proposal that we have a much changed regulator who has the power for a period of time to say, you actually have to come to me before you can legally sell your company and it won't be legal unless I've signed it off."

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