UK – The UK’s Occupational Pensions Regulatory Authority has warned against trustees making “inappropriate” deals with scheme sponsors – saying trustees should be more assertive with companies.

“The actions or inactions of trustees may also create risks to members benefits; for example, trustees may reach an inappropriate agreement with the sponsoring employer to compromise the employer’s debt on scheme windup,” Opra said.

The regulator said trustees need to actively raise their concerns about the impact of corporate actions such as mergers on the security of members’ benefits.

“Trustees need to be assertive when making such representations and in subsequent negotiations,” it said in a guide to the implications of the Pensions Act. Corporate activity needed to be monitored, it added.

And it added that senior corporate executives who are also trustees cannot disregard their knowledge of corporate activity.

“The trustee involved could declare his or her interest to the other trustees and consider their position,” the guidance states. “This could involve the trustee opting out of decision-making on that particular matter.”

The comments come in guidance on how to avoid pension liabilities in the light of the Pension Act. It said it was seeking “to reduce the risk to scheme members and the Pension Protection Fund (PPF) of pension liabilities being avoided”.

Earlier, the Department for Work and Pensions named former Marks & Spencer executive David Norgrove as the first chairman of the new Pensions Regulator, which takes over from Opra next year.

As chairman of the trustees at the M&S scheme, Norgrove was involved in the takeover battle for the company earlier this year. The pension fund became pivotal as the company sought to repel a bid from tycoon Philip Green.

“I am delighted that David Norgrove has agreed to take on this important role,” said pensions minister Alan Johnson.

“He has a strong track record in both the public and private sectors and will bring highly relevant skills, knowledge and experience to the crucial task or regulating work-based pensions.”

The DWP was not immediately sure if Norgrove would remain chairman of the M&S trustees.

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