Around two-thirds of pension specialists believe that members' benefits in defined benefit (DB) schemes will be better protected in the future, due to new rules being introduced by the government, research has revealed.
Consultant firm Aon surveyed 140 pensions professionals, including trustees, pensions managers and finance staff with pensions responsibilities, during a recent webinar focused on the Department for Work & Pensions (DWP) white paper and The Pensions Regulator's annual funding statement.
The DWP published last month (19 March) its 76-page defined benefit white paper, which sets out a series of new measures for the regulator "to undertake a tougher and more proactive role".
Besides creating new legislation to introduce a criminal offence to punish those found to have committed wilful or grossly reckless behaviour in relation to a pension scheme, the government is also giving The Pensions Regulator (TPR) powers to disqualify company directors, and introducing new punitive fines.
The government will also consider if the introduction of a targeted mandatory clearance process for specific corporate transactions, where the companies involved have defined benefit pension schemes, is necessary in the coming months.
The Work & Pensions select committee has, in the meantime, launched an inquiry into the new policies.
According to Lynda Whitney, partner at Aon, despite the expected good outcome of the new DB rules, "many of the powers can only come into force with legislation, so it will take up to three years to get to this position".
In its annual funding statement, published earlier this month (5 April), The Pensions Regulator increased the emphasis it places on the fair treatment between the pension scheme and other stakeholders, particularly dividends to shareholders compared to deficit contributions.
The regulator said that "trustees should assess the impact of dividends on the employer’s covenant and whether the scheme is being treated fairly in light of what it needs to pay the promised benefits".
According to Aon's survey, pension specialists don’t expect a significant impact from the watchdog's statement in the short term.
Ms Whitney said: "Although there is hope in the longer term that the DWP white paper will provide a significant shift for DB pension scheme security, there is still some scepticism about this year's annual funding statement and the suspicion that it will only offer slight improvements."
maria.espadinha@ft.com
