A Regulator that can look after herself


My favourite moment from an afternoon spent watching Parliament TV’s absorbing proceedings was when Lesley Titcomb, Pension Regulator turned to the Chair of the DWP Select Committee and smiled “If I need more powers, I know exactly how to get them”. It was not a put down, it was a statement of confidence that characterised an extremely competent performance.

There’s a podcast of my comments on this subject on Radio 5’s – you can listen to it here.

To say that the Pensions Regulator has to walk a tightrope is to belittle her work with a cliché. If she steps to the left she risks pushing an employer into insolvency, to the right and she’s giving an employer the chance to dump liabilities into the PPF and onto other schemes through the PPF levy. The same can be said of the trustees of a scheme such as BHS.

As Alan Rubenstein , CEO of the PPF explained, it’s easy enough for him to sit in judgement, he only has the interests of pensioners to worry about, the Pensions Regulator has to worry about their jobs and the jobs and pensions of millions of others to boot. Uneasy lies the crown.

So it’s good to see a Regulator not complaining or pleading for extra powers, but simply telling it like it is – sometimes with brutal honesty.

I guess the headline moment of her talk will be her frank admission of how she learned that BHS had been sold to the Retail Acquisition Group.

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It’s a little too like football manager’s finding out about their sackings. Our knee jerk reaction is to poor scorn on the Regulator for not regulating (something one member of the BIS committee actually did).

To dismiss the Regulator for her candour would be a mistake.

“I am a Regulator of limited remit”

Concluded Titcomb at the end of her session , that remit does not extend to corporate governance as (not) practiced in this instance. There was no law that said that Green and Chappell had to inform the Regulator of the sale, but in not doing so, they took a risk of exposing themselves – as they are now exposed – as acting with scant interest in anyone but themselves.

The problem is not with Pension Regulation it is with Corporate Behaviour, a matter for other parts of Government, not least the insolvency commissioners.

More a matter of poor corporate governance

My conclusion after watching both Alan Rubenstein and the Pensions Regulator is that we have a strong, honest and functioning Pensions Regulator and that the system is “working its way through” (another Titcombism I enjoyed).

Yes, the 23 year recovery period looks too long, but would a shorter period have served the PPF better – or BHS staff? That is a matter for speculation.

Yes, the behaviour of the Arcadia Group, as evidenced by their failed attempt to Guarantee the Scheme with a shell company suggests that the Regulator could have read the tea-leaves better

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But I cannot poke this Regulator with a stick, because she didn’t beat Green up, she had no business doing so. Her job was to protect the PPF, protect staff jobs and to use her powers as she could.

The sale of BHS is now an “anti-avoidance case” for the Pension Regulator, she is able to pursue individuals with contribution notices and I would not sit easy if I was under such investigation.

In my opinion the Pensions Regulator needs no more powers in this, than she has had and as Steve Webb put it in his written evidence to the committee

For as long as the past promises are sacrosanct, all options are ‘making the best of a bad job’.  But there may be ‘least worst’ options, and certainly ensuring that the regulatory regime is working as intended is essential.

In my opinion, we heard nothing from Titcomb or Rubenstein yesterday to suggest that the Regulatory system isn’t working and much that suggests that it is working well (at least so far as Defined Benefit Schemes are concerned.

That is not the same in all aspects of the Pension Regulator’s work and the supervision of master trusts is clearly an area where she needs more power and urgent legislation.

Frank Field hinted we may here more on this today. If his reason for writing to the Chancellor to get support for a Pensions Bill was to strengthen the Regulator’s powers to curb the proliferation of nonsense master trusts, I’m with him all the way.

But we should not assume that because part of the Regulator’s powers need fixing , that the rest need fixing too. The two issues are not as one, no matter how they may be reported.

But Lesley Titcomb , as we saw yesterday, fights her own battles when she is allowed to. I was pleased to see the Pensions Minister allowing her to do just that – earlier in the week.

We have a strong Regulator, skilled in her conversation and knowing her own powers. We should be grateful for that. We have a pensions minister who is at last able to do her job and we have an understanding, (if sometimes a tad patronising) Chair of the Select Committee.

I look forward to part two of this, and the discussions between Philip Green and Lord Myners.

To me, the BHS pension failure is a failure of corporate governance, not a failure of Pension Regulation.

You can watch the session here


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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4 Responses to A Regulator that can look after herself

  1. George Kirrin says:

    British Airways has/had a 23-year recovery plan, as I recall.

  2. George Kirrin says:

    “…. a failure of corporate governance ….”


    In more ways than one, Henry?

  3. George Kirrin says:

    Still believe she can look after herself, Henry?


    Sloppy prosecutions can sometimes lead to guilty parties getting off scot-free.

  4. George Kirrin says:

    Regulator blocked 2014 proposal said to be more attractive and cheaper than PPF £275m rescue, according to the FT, Henry.

    Yet more evidence that the other parties involved have a quite different story to tell, no doubt excusing the millions paid to professional advisers who can apparently do no wrong, all the while millions are cut from BHS pensions.

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