UK - Further clarification of the precise role the Pensions Regulator will play regarding the funding of defined benefits is crucial for business, the Institute of Directors (IoD) has said.
Miles Templeman, director general of the IoD, said a great deal depended on how the Pensions Regulator would work in practice.
“In particular, how will the Regulator be positioned along the scale from a pure referee to an active player alongside the employer and the pension scheme trustees?”
If acting as a referee, the Regulator would presumably review the evidence and decide whether or not the trustees and the employer would be likely to see the scheme out of difficulties on their own, said Templeman.
“As a player, the Regulator could take too much control. We would like to see the role fall somewhere between the two - sitting down with the parties, exploring ways forward for the scheme and helping the parties to reach agreement.”
In order to be effective in a role of referee and minimal player, the Regulator would need the attitude of a businessman, seeking to ensure that a good deal was done and not afraid to encourage a deal to which some risk was attached, even though the Regulator might be seen as partly responsible for the deal because of actions that were those of a player rather than a referee, he said.
The top stories this week were the High Court's decision to block the £12bn annuity transfer from Prudential to Rothesay Life, and a separate court ruling that 'raises the bar' for pension rectification exercises.
Guaranteed minimum pension (GMP) equalisation has soared to the top of pension schemes' to-do lists, with 58% stating it is a priority project, research from Equiniti has revealed.
Professional Pensions is holding its defined contribution (DC) conference on 4 September.