The Pensions Regulator has welcomed the introduction of new powers as outlined in the defined benefit white paper “as quickly as possible”.
While praising proposals to enhance its powers in the recent defined benefit white paper, The Pensions Regulator has also secured additional funding from the Department for Work and Pensions and increased its DB casework by 90 per cent.
In written evidence to the inquiry on the government’s Protecting Defined Benefit Pension Schemes paper, TPR voiced its approval of proposals that strengthen its ability to protect members and hold sponsoring employers and trustees to account when they fail to act in the interests of members.
Commenting on the proposals more specifically, TPR noted that it is in favour of the better information-gathering powers, including the power to compel attendance to interviews and improvements to its anti-avoidance powers. This will “improve regulatory tools available to us [TPR] and complement our drive to be a quicker and more efficient regulator,” it said.
Similarly, TPR said that the strengthening of its notifiable events framework and clearance regime will enable it to intervene “more quickly and decisively”. With these, TPR stated that the prospect of punitive fines and criminal sanctions will provide a “much stronger deterrent” against company director abuse.
Nonetheless, in order to deliver a more proactive and regulatory approach, TPR noted that additional resources are needed. To do so it has secured additional funding from DWP to support frontline casework including DB regulation, master trust authorisation and its future regulatory model.
As highlighted in its recent corporate plan, TPR agreed a budget with the DWP to spend an additional £8.3m on levy activity in 2018-19 and about £1m extra in each 2019-20 and 2020-21.
Nonetheless, TPR noted that the additional powers, as stated in the white paper are “just part of the picture”. With these the body is also looking at how it will approach DB regulation in the future and how it is transforming its regulatory culture.
While supporting the DWP in the development of legislative proposals in and around the White Paper, TPR is to consult on a revised DB Funding Code of Practice. This will outline the funding standards the regulator expects schemes to meet more clearly, it said.
“As an independent regulator, we have shown that we are prepared to make the case publicly for additional powers and we are pleased that the government listened to our arguments for tougher regulation of the growing master trust sector. We therefore welcome the government’s plans set out in the White Paper to provide TPR with greater powers to protect DB schemes. We worked closely with the DWP to originate the proposals and will continue to support the department as it develops legislation.”