Beware – proposed extension of the Pensions Regulator’s anti-avoidance powers


On 14 April 2008, the Department for Work and Pensions (DWP) announced its intention to enhance the Pensions Regulator`s powers “to require contributions to pension schemes when sponsor actions materially reduce the security of member benefits”. The announcement, which has since been followed up by a consultation paper, is primarily a response to the Government’s concern over the introduction of new “business models that look to sever the link between employer and scheme”. However, the Regulator’s extended powers would also apply to certain corporate transactions such as dividend payments, the reallocation of debt or mergers and acquisitions which have the effect of reducing the security of members’ benefits.

Download PDF