05 Apr Rosalind Connor comments in Pensions Expert on the lack of clearance sought from the Pensions Regulator
Just 21% of pensions and restructuring lawyers normally suggest that clients go through the Pensions Regulator’s clearing process, reflecting a similar decrease in clearance applications submitted.
The lack of clearance applications might indicate that advisers and employers better understand the regulator’s position and what is expected of them.
Rosalind Connor commented, “In the early days none of us really knew what the regulator was minded to do, what it could do.”
A 2011 upper tribunal hearing found that the regulator cannot consider whether clearance has been sought when deciding whether to use its powers.
Employers also have a statutory defence against an accusation of material detriment if they can show they had come to a reasonable conclusion that none would be caused.
Rosalind said these factors meant employers can now be advised properly so that they are largely safe from regulatory pursuit, particularly if they have ensured that trustees are independently advised and have no concerns about the transaction, which means there is less need for clearance.
Rosalind argued that anonymised case studies on previous applications would help advisers be better informed as to the Regulator’s likely actions, but that the Regulator has so far not been keen to explain its reasoning on all cases.
“It’s… very worried about setting a precedent,” she said, although she conceded that the organisation had recently shown itself to be very open to reviewing its processes.
Read the full article in Pensions Expert here.