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Impact Investing

IPE special report May 2018

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No initiative on scheme takeovers – UK regulator

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UK – There’s no specific initiative to allow investment banks, asset managers or hedge funds to take over pension schemes of financially challenged firms, the Pension Regulator says.

The comment was in response to an article in the Financial Times at the weekend suggesting the regulator is discussing the matter with the Financial Services Authority.

Pension Regulator spokesman Nick Edmans told IPE that the body has regular meetings with the FSA, the financial watchdog – but there is no specific initiative to allow third parties to take over pension assets and liabilities.

The report said the two bodies are considering allowing business to shed their pension liabilities to other providers, instead of just insurers as at present.

The FT said the regulator is expected to issue a discussion document in the next few months.

It also said the regulator is concerned about the possibility of ‘regulatory arbitrage’ – under which the funds escape the capital requirements for the insurance industry.

The FSA confirmed its regular meetings with the regulator but suggested the article was confusing the bulk annuities market with the area of funds of troubled companies – which would come under the remit of the Pension Protection Fund.

There was a question about the mechanics of how third parties could take over pension assets and liabilities – bearing in mind the presence of trustees.

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