In a strongly worded letter, Pensions Regulator chief executive Tony Hobman said there were several “serious inaccuracies” included in the press release on OPT’s launch and on its website. OPT says that it aims to set up a ‘national pension scheme confederation’ that will enable companies to remove closed defined benefit schemes from their balance sheets. It also said “OPT has been set up after extensive discussions with potential members and the Pensions Regulator.”
Bu Hobman said: “Can I make I absolutely clear that the regulator does not endorse vehicles such as that being promoted by your company. Any conversations between OPT and ourselves could not and should not be construed as an endorsement.”
Schemes transferred into OPT will continue to be run under existing arrangements but be overseen by a team of professional independent trustees at OPT. In return, for the sponsoring employer being able to remove the closed scheme from their balance sheet, they will be required to provide a cash injection, effectively placing a cash value on their covenant.
OPT says this does not constitute a ‘type A’ event and so companies do not have to apply for clearance. But Hobman has slammed this as inaccurate, pointing out that any change of ownership of a scheme should apply for clearance as best practice.
Hobman also attacked claims that the Pensions Regulator will “review investment management strategy”, as misleading.
OPT management are mostly from Telereal, a property company set up to buy British Telecom’s 7,000 telephone exchanges and other properties in a £2.2bn deal and development director Ben Shaw has been the face of its launch.
It claims to be able to offer firms an alternative between 10-20 per cent cheaper than a full buyout deal through an insurance company as it is taking a 35-50 year view on returns, hoping to pocket any actuarial surplus or sell on the schemes at this point.
The management of schemes moved across to OPT will be overseen by its board of independent trustees, chaired by former National Association of Pension Funds chairman Robin Ellison. It also includes John Wigley, formerly a senior partner at Watson Wyatt.