View more on these topics

TPR told to stand up to firms that ditch DB schemes

Legal & General wants regulator to crack down using its wide powers.

Legal & General is calling on The Pensions Regulator to “show some backbone” and crack down on employers that abandon defined-benefit schemes rather than passing responsibility on to trustees.

The company says it agrees with TPR’s views that scheme abandonment can rarely be justified. But in its response to consultation on TPR’s new guidance on the abandonment of DB schemes, it says it should punish employers that walk away from DB schemes without properly justifying the move.

The insurer is concerned that too much responsibility is being passed on to already overburdened trustees although TPR says the responsibilities of trustees are enshrined in legislation.

In situations where the employer is unable to pay benefits in full without going bust, L&G says it may be better for trustees and TPR to agree to a compromise arrangement in the form of a big cash injection to fund reduced benefits rather than “for all parties to struggle on and eventually fall into the PPF” later.

But TPR says it cannot approve arrangements and can only issue a clearance statement if an arrangement does not require it to step in.

L&G says longevity instruments could prove to be a “white knight” for the beleaguered final-salary sector and wants TPR to address why the market has failed to take off. It says the Government should issue longevity bonds to boost the market.

L&G says: “TPR has a wide range of powers and discretions and should be prepared and be seen to be using these and not relying on passing responsibility to already overburdened trustees.”

A TPR spokeswoman says: “We fully consider the circumstances of each individual case and would use our powers where deemed appropriate.”


People on the move

Bill Mott has returned to day-to-day fund management alongside former Credit Suisse colleagues Ian Chimes and Graham Fuller.

GE Life exits reversion market

The equity-release market has been dealt a blow after one of the leading providers, GE Life, pulled out of the home-reversion sector.The insurer cites low sales for its decision but has pledged to look after existing customers following its exit. It will now look to focus on the lifetime mortgage market.Safe Home Income Plans revealed […]

Winterthur appoints new MD after restructure

Axa has appointed Winterthur’s director of distribution David Thompson as managing director of Winterthur Life.The announcement is part of a series of planned senior appointments at Axa and Winterthur following the company’s decision in November 2006 to restructure its UK businesses. It was announced in November that Winterthur’s high net worth business will continue to […]

PruPim setting up Asia property fund

PruPim, the property investment arm of Prudential, has teamed up with La Salle Investment Management to launch an Asia property portfolio.


News and expert analysis straight to your inbox

Sign up


    Leave a comment