The Pensions Regulator

The Pensions Regulator is a non-departmental public body which holds the position of the regulator of work-based pension schemes in the UK. Created under the Pensions Act 2004, the regulator replaced the Occupational Pensions Regulatory Authority (OPRA) from 6 April 2005[1] and has wider powers and a new proactive and risk-based approach to regulation.

The Occupational Pensions Regulatory Authority was established by the Pensions Act 1995 and came into full operation on 6 April 1997. It replaced the Occupational Pensions Board as the regulator of occupational pensions in the UK.[2]

The Pensions Regulator has a clear set of objectives:

  • to improve confidence in work-based pensions by protecting the benefits of scheme members;
  • to reduce the risk of situations arising that may lead to claims for compensation from the Pension Protection Fund (PPF); and
  • to promote good administration of work-based pension schemes.
  • to maximise employer compliance with employer duties (including the requirement to automatically enrol eligible employees into a qualifying pension provision with a minimum contribution) and with certain employment safeguards

To meet these objectives The Pensions Regulator employs a risk-based approach, concentrating its resources on schemes which pose the greatest risk to the security of members’ benefits. The regulator also promotes high standards of scheme administration and works to ensure that those involved in running pension schemes have the necessary skills and knowledge.

David Norgrove was appointed the first chair of The Pensions Regulator in January 2005. After 2 terms, he was replaced by Michael O'Higgins in January 2011. Lesley Titcomb has been the chief executive since March 2015.[3]

Criticisms

Following the January 2018 collapse of construction and services company Carillion with extensive pension liabilities, The Pension Regulator faced calls that it should be scrapped and replaced by a new, more powerful body.[4] The "excoriating"[5] final report of the Parliamentary inquiry into the collapse of Carillion, published on 16 May 2018, described TPR as "feeble":

"The Pensions Regulator’s feeble response to the underfunding of Carillion’s pension schemes was a threat to impose a contribution schedule, a power it had never—and has still never—used. The Pensions Regulator failed in all its objectives regarding the Carillion pension scheme. Scheme members will receive reduced pensions. The Pension Protection Fund and its levy payers will pick up their biggest bill ever. ... the Regulator should not be spared blame for allowing years of underfunding by the company."[6]

After MPs' criticism of The Pensions Regulator, CEO Lesley Titcomb announced she would step down at the end of her four-year term in February 2019.[7] In June 2018, TPR's non-executive chairman, Mark Boyle, accepted the MPs' criticism but said the organisation's culture had changed. While it had been "business friendly", "insular" and "isolated" from key stakeholders, under Titcomb, the regulator had become clearer, quicker and tougher in its dealings with employers and pensions trustees, he said.[8] On 25 June 2018, TPR announced it was considering issuing a contribution notice – a legally enforceable demand for a financial contribution to the pension deficit – against former Carillion directors.[9][10]

References

  1. ↑ "Page not found" (PDF). thepensionsregulator.gov.uk. Retrieved 9 May 2016.
  2. ↑ Whitaker's Almanack; 1998; p. 331
  3. ↑ "Lesley Titcomb announced as new Chief Executive of The Pensions Regulator". thepensionsregulator.gov.uk. Retrieved 9 May 2016.
  4. ↑ Williams, Christopher (15 May 2018). "MPs call for pensions watchdog to be scrapped over Carillion failings". Telegraph. Retrieved 15 May 2018.
  5. ↑ Davies, Rob (16 May 2018). "'Recklessness, hubris and greed' – Carillion slammed by MPs". Guardian. Retrieved 16 May 2018.
  6. ↑ Carillion: Second Joint report from the Business, Energy and Industrial Strategy and Work and Pensions Committees of Session 2017–19 (PDF). London: House of Commons. 2018. pp. 91–92. Retrieved 16 May 2018.
  7. ↑ Curry, Rhianon (31 May 2018). "The Pensions Regulator head to step down". Telegraph. Retrieved 4 June 2018.
  8. ↑ Cumbo, Josephine (21 June 2018). "Pensions Regulator admits faults over Carillion crisis". Financial Times. Retrieved 21 June 2018.
  9. ↑ "TPR could go after Carillion's former directors "for everything they've got"". www.parliament.uk. Work and Pensions select committee. Retrieved 26 June 2018.
  10. ↑ Morby, Aaron (25 June 2018). "Carillion bosses could be landed with pension bill". Construction Enquirer. Retrieved 26 June 2018.
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