Trustees must not be too trusting of the Pensions Regulator’s (TPR) guidance for trustees on lifting the bar on assessing, monitoring and taking action when it comes to their employer covenant, says a pensions lawyer.

Clive Pugh, partner at law firm Burges Salmon, and a former employee at the Regulator, told Pensions Age that the Regulator is advising trustees to get a strong legal commitment from a successful company within their scheme, “or else you may well have to claim a greater debt for your scheme”.

“The blinkered view of relying on non binding promises could prove problematic and a downfall for trustees,” he said. “The larger company could simply refuse to pay, or suffer an event that undermines its whole business meaning it cannot honour non binding commitments – the bigger they are the harder they fall.”

Pugh said good scheme management means a regular review of members’ activity, and the Regulator’s call for proactivity will dramatically affect the relationship between trustees and members, “many of whom will not be used to helicopter parenting. This could be a good thing, but changes to the relationship should be managed sensitively and trustees should not demand to see every detail of recent activity out of the blue.”

So how far should trustees go? “Proactive trustees will need to set frameworks in place for managing the scheme and employers must be willing to share information readily for this shift to work.” Pugh added that for many this will be a big jump, but now is time for a change, and the pensions industry can no longer rely on promises and “blinkered optimism”.

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