11 October 2016

Investment & Pensions Europe: UK Pensions Regulator calls for power to veto corporate actions

In its written submission to the UK Parliament’s Work and Pensions Committee, which is conducting a broadened inquiry into the Pension Protection Fund (PPF) and TPR, the regulator highlighted several potential improvements to pensions regulation as it now stands.

The UK’s Pensions Regulator (TPR) has detailed a number of ways it believes its powers should be expanded to protect pension scheme members, including being given the ability to refuse clearance for certain proposed corporate actions.

A spokesperson for TPR said: “Our submission to the Work and 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.”

The submission highlights a number of potential improvements from TPR’s point of view, including developing the regulator’s way of working so that it focuses more intensively on those pension schemes posing the greatest risk.

It also proposes introducing mandatory clearance “in a targeted set of circumstances where corporate activity may pose a material risk to a scheme”, it said.

As things stand, there is no obligation on a company to apply for clearance from TPR for any transaction, or other relevant situation, the regulator said. The regulator went on to propose enhancing its information-gathering and investigatory powers.

On the subject of pension scheme funding, TPR proposed that greater flexibility be introduced over the valuation periods used, and said more regular valuations should be required for higher-risk schemes.

The regulator’s scheme funding powers should also be clarified so that it can specify an appropriate level of funding and contributions, it said.

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