UK - The government has today been urged to commit to a review of the regulatory regime governing companies such as Pension Corporation, as concerns continue over the future of the telent pension scheme.
He was representing those in his constituency of Knowsley North & Sefton East who are members of the pension scheme of telent, which was last year bought by Pension Corporation.
He questioned how the risk to pensioners could be mitigated by such a model if it didn't work, and urged Minister for Pensions Mike O'Brien to put pressure on the Pensions Regulator to extend the remit of independent trustees appointed to the board of the telent pension scheme beyond April.
Pension Corporation's acquisition of telent almost failed when the Pensions Regulator appointed three independent trustees because of concerns about implications for plan members.
At one stage, Pension Corp threatened to pull out of the deal but it eventually went ahead following discussions with both the regulator and trustees.
While O'Brien said he couldn't discuss Pension Corporation specifically, he raised concern about the pension buy out model.
Last week, the minister pushed through changes in a late-night amendment to the Pensions Act, giving the Pensions Regulator greater powers in the emerging pension buy-out market and making it easier to install independent trustees should it consider the interests of scheme members are at risk.
O'Brien said the issue was not just about the pensions at telent, but about a new model that the financial services industry had introduced to deal with pensions.
He said: "It seems to involve the treatment of a pension as just another commodity."
He added said last week's changes were just the first step and the regulator could be given further powers if necessary.
He said any new model should have a similar level of security as provided by a sponsoring employer or insurance company which had capital underpinning the risk.
He said: "I want to ensure the regulator has the right powers. In some cases the security of the employer is taken away but adequate capital is not put in place.
"It would not be fair to members or schemes that pay into the PPF if [the model] provides substantial risk without having the structure in place to deal with the risk."
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