Government consults on extension of TPR powers

The government plans – first announced on April 14 – would increase powers requiring employers to provide contributions to a pension scheme if their actions threatened member security.

The proposals will be subject to a formal eight-week consultation but the government said its intention is the core amendments should be effective from April 14.

The department for work and pensions said the focus of the government’s attention is the launch of new business models "which, among other features, may look to sever the link between the employer and the pension scheme, in order to operate well-funded occupational pensions schemes for profit but to the possible detriment of scheme members".

Pensions reform minister Mike O’Brien said: "I confirm safeguards will be included in the modified regulatory framework to regulate the potential detrimental effects of these new business models, as already required where the regulator considers it reasonable to do so, without frustrating normal business activity.

"We are not against these business models in all circumstances, but we need to ensure that the correct balance is struck between encouraging innovation and protecting pension members and the Pension Protection Fund."

Other changes in the regulator’s powers include a new alternative test that could trigger the issue of a financial support directive and a new alternative test that could trigger a contribution notice.

The consultation statement said: "As set out in the previous statement, the government considers it is necessary for the regulator to have the ability to make use of two amendments in relation to bulk transfers: the clarification that ‘an act or a deliberate failure to act’ may be constituted as a series of acts, and the removal of a loophole by which bulk transfers may frustrate the regulator’s moral hazard powers.

"In the first case this is because the government considers the legislation should always have been read in this way; in the second this is to prevent features of current legislation being exploited to avoid liabilities to pension schemes."