UK – The UK’s Pensions Regulator is looking to exercise its untested legal powers against 17 corporate sponsors that have purposefully attempted to avoid liabilities.
No names could be mentioned, but the implicated companies represent a wide and even spectrum.
“We will pursue some, but these are untried powers and we want to ensure that we can make things stick,” said the regulator’s executive director of delivery, June Mulroy.
If matters go to court, it was essential that a precedent is set reinforcing the regulatory body’s powers, and showing the powers are effective.
Mulroy was speaking in London today at a seminar organised by Fitch Ratings.
Some contribution notices have been sent to offenders, and a few cases are currently under review by lawyers.
Contribution notices – labelled “quite draconian” by some - are among the Regulator’s powers to ensure support. Others include improvement notices, the appointment of independent trustees and financial support direction (where the sponsor is insufficiently resourced).
The Regulator, created under the Pensions Act 2004, has only issued a threat to use these powers once before, Mulroy said.
Labelled more risk-focused and proactive than its predecessor - the Occupational Pensions Regulatory Authority (OPRA) - the body would “always take a risk-based approach” and only use its powers as a “last resort”, according to a Pensions Regulator spokesperson.
The regulator currently has 156 clearance queries on the desk, which may translate into applications for clearance.
Until now, clearance has been granted to between 79 and 80 corporate sponsors ranging from market giants to family businesses. However, Mulroy expects to go through thousands more clearance applications over the next year.
She also moved to dispel myths that the body had rejected numerous applications since its inception in April. It has only rejected two applications, said Mulroy.