UK prime minister Theresa May has promised to give the country’s Pensions Regulator (TPR) the power to veto mergers or acquisitions if they threaten the solvency of a connected pension scheme.
In a press release on the ruling Conservative Party’s website, the party said that “any company pursuing a merger or acquisition valued over a certain amount or with over a certain number of members in the pension scheme would have to notify the Pensions Regulator, who could then apply certain conditions”.
“In short we will tighten the rules on pensions during takeovers, and increase punishments for those caught mismanaging schemes,” the statement said.
May recently called a general election for 8 June this year, and the UK’s political parties have already begun their respective campaigns.
Today’s statement reflected proposals from the Work and Pensions Committee – an influential cross-party group of politicians from the UK’s lower house – published at the end of last year, following feedback from TPR.
Pensions minister Richard Harrington subsequently addressed the idea of expanding TPR’s powers as part of a consultation on reform of the defined benefit system.
The regulator’s powers were called into question last year during its investigation of the BHS pension scheme. The UK high street chain was sold in 2015 for £1 by the Arcadia group, owned by Sir Philip Green, while the scheme was left with a shortfall of more than £500m (€592m). Sir Philip subsequently struck a deal with TPR to contribute up to £363m to the restructuring effort for the pension scheme.
The Conservative Party’s statement said: “In recent years, the employees of large, household-name companies have found their pensions put at risk by the irresponsible behaviour of their bosses. But responsible companies managing their pension scheme in the right way have found their competitive position suffer from that same behaviour.”
The party added: “In cases where there is no credible plan in place and no willingness to ensure the solvency of the scheme, the Pensions Regulator could be given new powers to block a takeover. This would include the power to issue punitive fines for those found to have willfully left a scheme under-resourced.
“If fines proved insufficient, the company directors in question could be struck off for a period of time and a new offence could be introduced to make it a criminal act for a company board to intentionally or recklessly put at risk the ability of a pension scheme to meet its obligations.”
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