NEWS   |    September 1, 2020

Partner Rosalind Connor comments in Pensions Expert on the Pensions Regulator’s ‘fast-track’ proposal

The introduction of a twin-track approach to regulating defined benefit scheme funding could stifle the creativity needed to navigate the current financial crisis, experts have warned.

Recent statements by the Pensions Regulator about the ‘fast-track’ arm of its proposals have been unable to appease some industry players, as the deadline for responses to its consultation comes to a close on September 2.

Rosalind Connor commented that the regulator’s duty to protect sustainable employer growth should prevent fast-track from having an unnecessarily adverse effect on all employers. But she added that its prescription could prove incompatible with the diversity of sponsoring businesses in the UK.

She further commented:

“If well done, I don’t see any problem with the twin-track approach. The risk is that, if not very carefully communicated and managed, it encourages trustees to assume that the ‘fast track’ is right for their scheme whether or not it is.”

“I think the industry all agrees that a return to prescription that we had with the minimum funding requirement is not a good idea, and the risk is that a presumption that fast-track is the way to go may very well lead to prescription again.”

Read Rosalind’s comments in Pensions Expert.

The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. Arc Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.

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