14 December 2006
The Pensions Regulator (tPR) has issued the following press
release:
"The Pensions Regulator prompts debate on scheme abandonment
. Concerns over pension scheme abandonment prompts discussion
paper
. Regulator begins debate on ways to manage defined benefit
scheme risk
. Draft guidance to help trustees consider such proposals also
published
Industry debate about corporate deals which may lead employers
to abandon their pension schemes was prompted today by the Pensions
Regulator following the concerns it raised in October.
After proposals which seek to sever the link between employers
and their defined benefit pension schemes were brought to its
attention, the regulator has now issued a discussion paper,
alongside draft guidance, to help trustees identify such proposals
and consider their implications.
Chief executive Tony Hobman said: "We recognise that the
definition of abandonment may not be clear cut in every case. That
is why we believe guidance is needed. It will help trustees
identify transactions that may result in abandonment, and guide
them on the factors to assess when reviewing the merits of the
transaction for scheme members."
In its paper, the regulator has invited the industry and other
interested parties to respond to key areas it has identified.
Hobman added: "Our position remains that, in most situations,
the best means of delivering pension scheme members' benefits is
for the scheme to have the continued support of an employer of
substance which is capable of meeting the scheme liabilities.
"We encourage early discussion between those involved in any
potential abandonment case and ourselves to identify whether
abandonment is involved and what should be done to scrutinise the
proposals."
The deadline for responses to the discussion paper is 9 February
2007."
