The Association of Consulting Actuaries (ACA) has claimed the process The Pensions Regulator has to go through before deciding whether or not to use its powers should be made less laborious.
ACA chairman Bob Scott said while The Pensions Regulator already has significant powers, some of which it has used only sparingly and others of which it has never used at all, it might be worth considering whether it could be made easier for it to embark on regulatory intervention using its existing powers.
He made the comment as part of the association's response to the Department for Work & Pensions green paper on security and sustainability in defined benefit pension schemes.
The response addresses the wide range of questions posed in the consultation paper, opposing a general need for more regulatory powers, but calling for three new flexibilities that it feels would help in the sustainability of defined benefit schemes.
On member protection and new powers for The Pensions Regulator, the ACA response stated "we do not believe that there is any significant evidence that members need additional protection or that substantial new powers are needed for the Pensions Regulator.
"While several recent high-profile cases have raised the question of whether members have adequate protection, the outcome of these cases has seen members generally receiving (or expecting to receive) benefits above Pension Protection Fund minimum levels, which should be regarded as a qualified success for the current regulatory regime.
"We also do not believe that recent events have demonstrated any significant failings on the part of The Pensions Regulator.
"In fact, it is arguable that the failures seen in recent cases such as BHS have been failures of corporate governance rather than of pension regulation.
"It might be helpful for the government to consider how all regulators can use their existing powers to influence good corporate governance in relation to decisions and advice affecting workplace pension provision, and to encourage closer working practices between different regulators"
Leading actuary and partner of KPMG, David Fairs, called for simplification of defined benefit pension schemes regulation.
He said: “Changing regulation has meant that all schemes have ended up with multiple ages at which members become fully entitled to their benefits and different levels of pension increase applying to different elements of their pensions.
“In our view simplification would not only boost consumer engagement but it would also solve some of the hurdles facing the creation of the government’s pensions dashboard."
stephanie.hawthorne@ft.com
