The Pensions Act 2004 established a new kind of regulator – The Pensions Regulator (TPR) and a protection fund for members of underfunded occupational pension schemes with an insolvent employer – the Pension Protection Fund (PPF).
The Pensions Regulator
TPR has increased powers to minimize the risk of pension schemes falling into the PPF because of underfunding and to prevent employers attempting to avoid their pension scheme liabilities. The circumstances in which these powers can be exercised are wide-ranging, as are those who may be subject to them. As a result, trustees of defined benefit pension schemes will need to effectively monitor corporate activity and take appropriate advice as to whether they should be seeking additional funding or security for the pension scheme.
Liaison with TPR is an increasingly important part of scheme governance in a number of discrete areas, including:
- anti-avoidance (and its associated clearance procedure) on corporate transactions or restructuring;
- scheme funding issues where a recovery plan is proposed.
Sackers’ Regulatory Unit has the knowledge and expertise to advise employers and trustees on what the provisions mean for planned corporate activity and whether seeking clearance from TPR is advisable.
Pension Protection Fund
The PPF has taken on an increasing number of schemes recently, partly as a result of the difficult economic climate but most schemes involvement with the PPF remains linked to the PPF levy. Our services to schemes in relation to the PPF include:
- drafting and submitting contingent asset documentation and other risk reduction documentation;
- clarifying PPF status for schemes with unusual benefit structures;
- advising schemes entering PPF assessment periods.
Sackers’ specialist PPF and Insolvency team has the knowledge and expertise to steer trustees and employers through their dealings with the PPF.
Back to the top