The Pensions Regulator

Regulator debates role in corporate transactions at NAPF Investment Conference 2006

Ref: PN06-10
17 March 2006

Speaking today at the NAPF Investment Conference in Edinburgh, June Mulroy, executive director of delivery at the Pensions Regulator, reassured delegates over the role of the regulator in corporate transactions.

During a debate entitled: 'The Pension Regulator's power over corporate transactions - a force for good or ill?' Mulroy said: "Building confidence in work-based pensions is an essential element of the overall drive towards good, secure pension provision."

Mulroy emphasised the importance of the work of the regulator, saying: "The regulator's involvement has resulted in increased protection for pension scheme members in the many and varied negotiations we've been party to."

She also stressed that the regulator could not block transactions, pointing out that healthy businesses ensure healthy schemes, and said that the optional clearance process was being used to "offer certainty and reassurance for business."

The debate also considered the effect of the Pension Protection Fund on levy paying funds and on corporate activity and wealth creation in the UK. Mulroy said: "These powers ensure that levy payers don't end up carrying the tab in the event of unscrupulous employers dumping their liabilities. The regulator's involvement in corporate transactions will ultimately help to control the cost of the PPF levy."

Mulroy concluded by reaffirming the goals of the regulator: "We will continue to work with the industry towards eliminating pension deficits, protecting retirement provision and reducing pensioner poverty.

"This will not be a pain-free process, but it is a journey that we can't keep putting off. The regulator's task is to make sure it happens, and we are determined to play our part in achieving the positive outcome that is in the interest of all of us."

Editor's notes

1. The NAPF's Investment Conference was held at the Edinburgh International Conference Centre between 15 and 17 March 2006.
2. June Mulroy was joined in the debate by Nigel Doughty of private equity fund managers Doughty Hanson, and Alan Rubenstein of investment bank Morgan Stanley.
3. The Pensions Regulator is the regulator of work-based pensions in the UK, with wider and more flexible powers under the Pensions Act 2004. It replaced Opra which no longer exists.
4. The powers of the Pensions Regulator include the ability to:
   • collect more detailed scheme information;
   • issue improvement notices and third party notices, enabling the regulator to ensure problems are put right;
   • freeze a scheme that is at risk, while the regulator investigates; and
   • prohibit trustees who are judged not fit and proper to carry out their duties.
   • The Pensions Act 2004 also imposes a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator.