The Pensions Regulator

The Pensions RegulatorArticles

The Pensions Regulator

The Pensions Regulator welcomes suitably qualified professionals from firms in the City of London on secondment for periods of between six and 12 months. This enables individuals to 'get under the skin' of the regulator and understand the implications of the Pensions Act 2004 from the inside. The regulator gains from better links with the City and a valuable business perspective, while the structured programme of support it provides, including a recently launched alumni network, helps to ensure that secondees get the most out of their placement.

The Pensions Regulator was created under the Pensions Act 2004 and came into being on 6 April 2005. It replaced the Occupational Pensions Regulatory Authority (Opra) as the regulator of work-based pension schemes in the UK. Based in Brighton, it employs around 300 staff.

Modernising regulation

In addition to having wider powers than its predecessor, the regulator has established a proactive, risk-focused approach to regulation that seeks to identify and prevent problems with pension schemes before they arise. In an era of legislative change and increasing complexity in pensions law, a key priority is to encourage good practice in running pension schemes and to work with schemes to get them on the right track. This is being achieved partly through improved channels of communication with the City – particularly with the law, accountancy and actuarial firms that advise pension scheme managers – and the creation of opportunities for corporate lawyers, business analysts and case managers to be seconded to the Pensions Regulator to get an 'inside track' on the new regulator and its policies.

Working in partnership

The regulator now has a centrally co-ordinated system for planning and managing secondments. This replaces what, under the Opra regime, was a reactive and localised process with departments setting up secondments independently to meet a perceived need. The new regulator regards secondments as strategically significant, so much so that it has appointed a full-time secondment manager, Phil Ashford, to oversee the programme. As Ashford explains: 'We now have a proactive and fully managed process that helps all parties take the maximum benefit from the secondment.'

Why secondments?

The Pensions Regulator sees secondments as beneficial to all concerned – the individual secondee, the parent organisation and the regulator.

Benefits for secondees …
Secondees gain from having an opportunity to work at the cutting edge of policy development, acquiring new skills and enhancing their CV in the process. They also benefit from a wider outlook – for example, from working with companies of different sizes in a variety of industry sectors. As well as facing challenges quite different to those they might expect to face in the private sector, secondees are given opportunities to 'shape how things are done' at the still-developing regulator and to understand better the impact of regulation on companies and markets.

… the parent organisation
Sending an employee on secondment to the Pensions Regulator is an opportunity for the employer to develop expertise on the implications of pensions policy for their clients. According to the regulator, a secondment also enables the parent organisation to: enhance organisational knowledge and good practice through the secondee; develop the employee's abilities by providing a new challenge; and develop an outward-looking staff base. But perhaps the biggest advantage of secondments is the potential boost they can provide to the parent organisation's reputation and image. 'Pensions are increasingly on the agenda for City clients,' explains Ashford, 'so having an analyst with a secondment to the regulator under their belt is a distinct commercial advantage.'

… and the regulator
For the regulator, the inward secondment of highly-skilled financial and business analysts, lawyers and case managers is integral to its more outward-looking and commercially focused model of regulation. For example, the clearance process that the regulator provides (focusing on the corporate transactions that may have a detrimental impact on a pension scheme) relies on multi-skilled, cross-functional teams being created 'on spec'. Secondments allow the flexibility to resource professionals with the appropriate skills and experience to manage the case, while reinforcing the collaborative working practices that these temporary 'virtual' teams rely on. The private sector experience that secondees bring with them is also seen as invaluable, helping the regulator to understand the broader challenges of policy making in commerical markets.

Length of secondments

Although there are no hard and fast rules on the length of secondments to the regulator, a typical placement lasts between six and 12 months. 'Anything less than six months does not provide the full benefit,' explains Ashford, 'and longer than a year is unrealistic for many parent organisations, which want to draw on the expertise gained on secondment sooner rather than later.'

Who pays?

The regulator has a flexible approach to the funding of secondments, which may be:

• fully reimbursed by the regulator
• partially reimbursed by the regulator, with the balance being funded by the parent organisation
• fully funded by the parent organisation.

In practice, funding is arranged on a case-by case basis. At present, the regulator is likely to pay the salary of the secondee and will fund additional journey costs to its offices in Brighton. It also meets reasonable travel and expenses claims made by the secondee in relation to regulator business. In future, as the secondment programme becomes more established and placements prove to be commercially advantageous, the Pensions Regulator expects parent organisations to be willing to bear more of the costs.

Picking the best

The regulator is interested in attracting high calibre individuals on secondment. Candidates undergo a thorough selection process, often involving several interview rounds. Potential secondees can look at sample job profiles on the regulator's website to help them assess their suitability for a position. Business and financial analysts, for example, are expected to have broad industry experience in a corporate advisory capacity. They should have extensive knowledge of corporate and financial management, including turnaround/recovery, structured finance, mergers and acquisitions, and business restructuring. 'Secondments are not for everyone,' explains Ashford. 'We look for talented professionals with credibility in the City and a good track record of success.'

Ongoing support

Individuals on secondment to the regulator are provided with a structured programme of support to ensure that they fully benefit from the placement. An online induction, accessible via the regulator's intranet, gives new secondees an overview of the regulator's strategy and values, together with examples of frequently asked questions and an illustration of the virtual structure of case management teams. New starters also complete a standard departmental induction.

In addition, secondees agree a development plan with specific objectives; receive appropriate development training and ongoing support, often in the shape of a 'buddy' or mentor; and have performance reviews at regular intervals. Because secondees are typically highly qualified and experienced, these reviews tend to be candid one-to-ones rather than formal box-ticking exercises.

Secondees also have opportunities to reflect on their experiences with fellow secondees. The regulator has established a secondee knowledge transfer exchange, which meets monthly and is a forum for sharing knowledge and best practice.

Staying in touch

To avoid potential conflicts of interest, individuals are not allowed to do case work for their parent company for the duration of their secondment to the regulator. However, maintaining contact is regarded as vital, as Phil Ashford explains: 'An umbilical cord back to the parent organisation is hugely important. Secondees often continue to participate in team meetings or networking events at their parent company, which makes it easier to reintegrate once the secondment ends.'

Moreover, the line manager at the parent organisation typically has frequent contact with the seconded employee, to stay informed of progress. 'Some of our secondees go back to the office once a month for an informal one-to-one, while some bosses prefer to phone here for updates,' says Ashford.

Taking the programme forward

The regulator currently has around 20 secondees in post. The target is for secondees to eventually make up eight per cent of the workforce. 'Ideally we want to establish long term relationships with the City and have around 15 or 20 organisations sending us two secondees a year,' says Ashford. 'We can offer secondments in all of our key departments to provide a variety of learning. For example, a firm that has had people seconded to the clearance team in the past may benefit from secondments to our department dealing with recovery planning, which is becoming more of an issue. We already have solid relationships with some big companies in the City – for example, KPMG and Deloitte Touche Tohmatsu – and are looking to strengthen our links with other partners in the coming year.'

Ashford is keen to point out that 'a secondment to the regulator is just the beginning of what we hope will be an ongoing relationship. We are attempting to establish networks that strengthen the bridge between us and the industry.' In keeping with this approach, the regulator recently launched an alumni network, which all secondees become members of when their secondment ends. This provides continuity to the programme and an opportunity to reinforce links with the wider business community. 'We are planning regular six-monthly events for alumni,' says Ashford. 'Again, this is about sharing knowledge and not only giving people the inside track on the business of the regulator, but also finding out how our policies are perceived in the City.'

The secondment agreement

An individual on secondment to the Pensions Regulator retains their parent organisation's terms and conditions. A statement to this effect is included in a written agreement, which details the contractual and cost implications of the secondment. The regulator issues a checklist to ensure that all the relevant information is captured when drawing up the agreement. The final document is produced either by the regulator or the parent organisation, before being agreed and signed by all parties. It should include:

1. A statement to the effect that the employee is still employed by the parent organisation but is temporarily seconded to the regulator for the duration of the secondment period
2. A role description listing the main duties, tasks and key objectives for the placement
3. Details of who the secondee will be reporting to within the regulator and any buddy/mentor arrangements that have been agreed
4. Details of pay, including: NICs, pension contributions and any salary increase due for the period of secondment; whether the regulator or the parent organisation is going to bear the total/part costs; and invoicing procedures
5. Other benefits due to the secondee (eg bonuses and holiday entitlement) and whether the regulator or the parent company will bear the costs
6. Working pattern (ie start and finish times each day and total hours)
7. Details of long-term sickness cover provided by the parent company
8. Expenses entitlement on a monthly basis, and whether the regulator or the parent company will bear the cost
9. Dates/costs and content of any formal courses/developmental activities and whether the regulator or the parent company will bear the cost
10. Data protection compliance
11. Appraisal process
12. Induction process
13. Indemnity, where appropriate
14. Conflict of interest and probity statement
15. Health and safety requirements
16. A clause pertaining to the non-poaching of the employee by the regulator (typically, the stated period is 12 months from the end of the secondment)
17. Notice periods for the termination of the secondment
18. Details of any work or training that the secondee is required or expected to do for the parent organisation during the secondment period.

Published: IDS HR studies, December 2006