The Department for Work & Pensions (DWP) has said it will improve the regulatory grip of The Pensions Regulator (TPR) so that the body can better deal with the rogue handling of defined benefit (DB) schemes used by a select few employers.
As stated in a White Paper entitled Protecting Defined Benefit Pension Schemes, DWP recognises that most employers want to “do the right thing” by their staff regarding pension schemes, but states that it is necessary to guard against the “small minority” who may be putting workers at risk.
In recent months, a discussion has emerged providing greater clarity around the existing funding standards. TPR has since said that it will now enter into talks with stakeholders about how this might work, including how to revise its DB Funding Code of Practice to set out its expectations of trustees and employers.
The regulator will be able to punish those employers who deliberately put their pension schemes at risk by introducing punitive fines. It will also be able to provide guidance or support to trustees and employers when dealing with events that may impact on their pension scheme.
In addition, the Government said it would ensure that TPR receives the information it needs to be able to conduct investigations effectively and efficiently and will give the body the ability to respond more quickly and decisively where it is believed that wrongdoing has taken place.
TPR had previously called on the Government for more effective powers, so the organisation is delighted with the proposals.
As a spokeswoman for the regulator said, the body will gain the ability to be clearer about what it expects from employers in relation to scheme funding and tougher where a scheme is not getting the funding it needs.
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