Employers support more targeted TPR powers – ACA

Around 70 per cent of employers believe that The Pensions Regulator (TPR) needs more powers to help protect defined benefit pension schemes, according to research from the Association of Consulting Actuaries (ACA).

However, ACA’s 2018 Pension Trends Survey found that 72 per cent felt that those powers should be targeted on “unscrupulous” employers, rather than all employers.

Furthermore, 66 per cent said that a more hard-line approach to funding would increase conflict with TPR’s ‘sustainable growth’ target, and 62 per cent thought that more specific guidance would undermine scheme specific funding.

ACA chair, Jenny Condron said: “Our survey found employers seem happy to see rogue directors or trustees pursued much more vigorously than has been the case to date, but they are far from convinced that a radical re-writing of the scheme funding code for defined benefit schemes is justified. Targeted action would seem to be the priority not an ‘en masse’ change.”

Employers are also feeling the strain of DB costs, with 55 per cent of those surveyed believing that the cost of their DB scheme is adversely impacting on their business performance, with 84 per cent calling for a legal change in the upcoming Pensions Bill to permit DB schemes to pay lower annual increases.

Condron continued: “On scheme flexibility, employers are clearly disappointed that the recent DB White Paper seemed to rule out the ability of more schemes to move to lower annual increases in pensions in circumstances where the sponsoring employer is in serious financial difficulties.

“This seems to be a sensible reform and one the government has widely followed itself across public sector schemes. It seems totally unreasonable that private sector employers continue to be discriminated against and we trust the government will think-again on this sensible reform.”

ACA revealed that transfer requests from DB scheme members was down from last year, with 41 per cent of schemes experiencing 5 per cent or more members seeking transfer requests. However, completed transfers remained at a similar level to last year, with 18 per cent of schemes experiencing 5 per cent or more employees completing a transfer.

The survey also found that 61 per cent of employers thought that schemes should be required by law to provide data for the proposed pensions dashboard and just 19 per cent said that they favoured having more than one dashboard.

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