The DWP Select Committee, currently the only centre of pension’s expertise in the House of Commons, has called for written evidence on Defined benefit (DB) pensions regulation by the Pensions Regulator (TPR), including:
the adequacy of regulatory powers, including anti-avoidance provisions
the application of those powers, including in specific cases other than BHS
the level and prioritisation of resources
whether a greater emphasis on supervision and pro-active regulation would be appropriate
whether specific additional measures for private companies or companies with complex and multi-national group structures are required
the pre-clearance system, including whether it is adequate for particular transactions including the disposal of companies with DB schemes
powers relating to scheme recovery plans
the impact of the TPR’s regulatory approach on commercial decision-making and the operation of employers
It also calls for submissions about The Pension Protection Fund (PPF), including:
- the sustainability of the Pension Protection Fund
- the fairness of the PPF levy system and its impact on businesses and scheme members
The role and powers of pension scheme trustees
Relationships between TPR, PPF, trustees and sponsoring employers
The balance between meeting pension obligations and ensuring the ongoing viability of sponsoring employers, including:
- TPR’s objective to “minimise any adverse impact on the sustainable growth of an employer”
- whether the current framework is generating inter-generationally fair outcomes
- whether the current wider environment, including very low interest rates, warrants an exceptional approach
In each instance, recommendations of potential improvements are particularly welcome.
We can submit our views through the Pension Protection Fund and Pensions Regulator inquiry page.
This is a matter of national importance and the DWP select committee is fit for its purpose.
This is how democracy should work and I hope that those reading this will apply their mental resources and their experience to the task.
My thinking is this. We have a Pension Regulator that knows the scope of its powers and has shown that at time, such as in the negotiations with BHS, its powers are limited.
One of the questions is whether we should reform the powers of the Pension Regulator, or reform the system of corporate governance that allowed tPR to be given the run around.
Another question is how those , like Green and Chappell who game the system, are gamed by society. I use the word “game” as anyone who can employ unlimited legal and financial advice – can play the system.
If we applaud such behaviour by reading magazines displaying the protagonists on their super yachts, we are endorsing the “winner takes all” morality set of the wolf of Wall Street.
If we decide that the yacht owners are anti-social and that their lifestyles have been at the expense of thousands of former employers, then we need to do more than stop reading glossy lifestyle magazines.
What sanctions we can apply to Green and his like are unlikely to be financial, he has- in the eyes of the law- done little wrong, and whatever law we write, Green will find lawyers and financial advisers to subvert it.
A social contract
I think it more likely that we will create an environment where the likes of Greene cannot carry out their casual wealth transference, where behaviour of his kind, is so discouraged that it ceases to happen.
The open media we now has that means that from Jo Cumbo and the FT to the humblest tweeter, the questions that the DWP are asking are openly discussed, leads to answers that are democratically arrived at and carry the weight of a popular consensus.
I don’t mean mob rule, I do mean open Government. A social contract can arise from a society that is properly engaged in the subject at hand. If you include the millions of us who are benefiting from defined benefit schemes (either today or tomorrow) provided by the State, then every member of society has an interest in pensions.
The narrow sub-set of corporately sponsored defined pension schemes (such as BHS) actually cover a relatively small amount of the workforce and they are diminishing fast as the flow of future accrual slows to a trickle.
But the opportunity to redistribute wealth in the playful fashion employed by Green doesn’t end with these questions. You can read about the Gamification of the poor every day on this blog.
We cannot as a society decide that what Green does is bad, when we have an occupational DC industry that tolerates not paying Government Incentives to our poorest contributors.
The social contract I would argue for is one that – as Theresa May would have it- is on the side of those “just getting by”. For the contract would seek to redress the institutional bias that allows money to flow in one direction only.
The weight of a nation
If I can indulge in a moment’s patriotism, I am very proud of being British and having the opportunity to contribute to the DWP Select Committee’s call for evidence.
I don’t think that comment on this subject should be restricted to actuaries and other pension experts, though I suspect they will form the body of responses. I hope that those in retail financial services and more importantly those yet to receive or in receipt of pensions will contribute as participants in the retirement business.
So please – if you are reading this, look at those questions and ask yourselves whether you have views and- no matter how silly you may feel in doing it – make those views known.