Cheap treat

21 March 2013 By Robert Cole

For years, pensions regulation has seemed to treat firms purely as entities to pay retirement payouts. A line in George Osborne’s budget heralds a more realistic approach: regulators should consider employers’ growth prospects too. Scheme sponsors and pensioners can both cheer.

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George Osborne, Britain’s Chancellor of the Exchequer, charged the UK Pensions Regulator with a new responsibility to have regard for the growth prospects of pension-scheme sponsors.
Michael O’Higgins, the chairman of the Pensions Regulator, said: “In light of the government’s proposal for a new objective to take account of the sustainable growth plans of the sponsoring employer, we will make the changes required … as part of a review of the Code of Practice for defined benefit (DB) funding that we will launch as soon as possible this year”.
John Cridland, CBI Director-General, said: “The new obligation on the Pensions Regulator acknowledged that the huge commitment employers are making to sustain pensions for employees cannot be separated from the drive for growth”.
Joanne Segars, chief executive of the UK’s National Association of Pension Funds, said: “We back the broader focus of the objective and look forward to seeing more detail. The new objective needs to strike the right balance between protecting savers’ interests, helping good defined benefit pensions remain open, and ensuring pension regulation does not hinder investment and growth”.

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