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Pensions regulator calls for power to intervene in company mergers

Lesley Titcombe

The Pensions Regulator has called for more power to intervene in company mergers where it thinks final-salary pension schemes might be at risk.

Firms with large pension deficits would need to tell TPR if they were planning to sell up, allowing the regulator to stop scheme liabilities being dumped if it needs to.

In an interview with the BBC, TPR chief executive Lesley Titcomb says a bolstered remit for the regulator could stop sales going through without TPR’s knowledge.

Titcomb says: “We may need new powers in certain situations. For example, where a company is being sold and the scheme is significantly underfunded, then it may be appropriate for the regulator to be told in advance about the transaction, and it may be appropriate for us to have the power to intervene in some way, which we don’t have at the moment.

“There’s no requirement to tell us. There’s no requirement to come to us for clearance and we have no power to intervene if people do.

“The vast majority of employers comply with the law and do the right thing. What we want to tackle is the particular limited set of circumstances where, for example, a sale can go ahead without us being aware of it.”

TPR has been questioned as part of an inquiry by MPs into the collapse of high street retailer BHS which has left a reported pension deficit of £600m.

Under its current powers it can take action in the aftermath of sales if they were found to be specifically designed to reduce pension liabilities, but cannot proactively intervene on sales.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Bureaucracy gone absolutely mad. We have compliance departments, the DTI, the Competition Commission, HMRC and goodness knows who else poking their noses into commercial enterprises and M&A activity. Now the Pensions Regulator wants to join the throng.

    I wonder what sway they would have when a foreign firm does a buyout and moves everything abroad? Business incentive is being progressively strangled. The real answer is that all DB schemes should be shut down ASAP and certainly closed to further accruals.

    On the one hand Westminster bleats about encouraging firms and new operations and reducing red tape and then proceeds to do exactly the opposite.

  2. J C Almighty. The very last thing we need in this world is The Pensions Regulator who has absolutely no clue about the world of business, mergers, or takeovers being given the final say on buyouts. If anything is likely to make this country an uncompetitive place to try to do business, it is over-regulation. In the name of all that is holy, keep these idiots away from this.

  3. Does not address the issue of employers simply going bust with a scheme deficit.

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