MPs of two Parliamentary committees have questioned The Pensions Regulator's targets for defined benefit (DB) scheme supervision, which remain unchanged from the previous year and “appear very modest”.
Frank Field, chair of the work and pensions committee, and Rachel Reeves, chair of the business, energy and industrial strategy committee, wrote to the watchdog chair Mark Boyle, as part of the inquiry into the collapse of Carillion.
The MPs said that they were disappointed that the regulator’s key performance indicator (KPI) targets for DB schemes in 2018/19, announced in its corporate plan published earlier this month, remain unchanged from the previous year.
The targets “appear very modest in scope,” said the MPs, asking if the regulator shouldn’t be pushing for more stretching targets.
For example, the proportion of assessed DB scheme risk the regulator has engaged with during the last three years was 70 per cent for 2017/18, and remains the same for 2018/19.
It is the same for the number of schemes it proactively engages with ahead of a formal valuation, which is 90 per cent for both years.
In its scathing report about the collapse of Carillion, the Parliamentary committees said TPR made "hollow threats" and "failed in all its objectives" during its engagement with the contractor.
Carillion had 13 final defined benefit (DB) in the UK with more than 28,500 members, and an aggregate deficit for PPF purposes of around £800m.
It is expected that 11 of these plans will ultimately end up in the pensions lifeboat, with the vaste majority of these already in assessment at the Pension Protection Fund (PPF).
After unsuccessful talks with its lenders and the UK government, Carillion made an application on 15 January to the High Court for compulsory liquidation.
The MPs report also said the regulator's problem won't be solved only with new powers, and the watchdog needs a "cultural change in an organisation where a tentative and apologetic approach is ingrained".
The report stated: "We are far from convinced that The Pensions Regulator's current leadership is equipped to effect that change."
In the letter, MPs question how TPR board will be evaluating the performance of its current chief executive, Lesley Titcomb, which will have her role up to renewal in March 2019.
In response to the committees’ letter, TPR’s chair Mark Boyle said:“TPR is a very different organisation from five years ago – we have become clearer, quicker and tougher and we are implementing an ambitious programme of change that is transforming the way we work.
“We have completed a wholesale review of how we regulate under our TPR future programme - we are intervening more quickly and decisively.
“We have recovered more than £1bn for defined benefit schemes, with the largest settlements over the past two years in the BHS (£363m) and Coats (£329m) cases. Only last week the courts found that TPR was right to pursue anti-avoidance action against ITV to secure financial support for pensioners.”