The Department for Work and Pensions (DWP) has launched a consultation on whether The Pensions Regulator (TPR) should be given an additional objective to consider the long-term affordability of deficit recovery plans for sponsoring employers of defined benefit schemes.

The consultation highlighted concerns of stakeholders who felt that whilst TPR focused on the protection of members’ benefits and the protection of the Pension Protection Fund, it failed to consider the impact to sponsoring employers.

It said: “Whilst there is already recognition in TPR’s Code of Practice and guidance for trustees that the reasonable affordability of recovery plans for sponsors should be considered by trustees, it was felt that there was a discussion to be had as to whether an explicit duty or objective would be appropriate.”

The National Association of Pension Funds policy director Darren Philp welcomed the idea of a new regulatory objective: “We need a quick, simple and temporary approach that gives trustees and employers more wriggle room. We need something that schemes can benefit from quickly, which is why we think the best way forward is reassurance from the regulator that a simple and transparent adjustment can be made to the discount rates being used by schemes now.

“We welcome the government consulting on a new objective for the regulator. We have long argued that the regulator needs to take into account the longer-term sustainability of workplace pensions.”

The call for evidence follows George Osborne’s Autumn statement when he promised that the department would consult on providing TPR with this new statutory objective. The consultation will close on 21 February.

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