4th December 2018 Rosalind Connor comments in Law360 on the Pensions Regulator’s public criticism of Southern Water
Utility company Southern Water has agreed to pay significantly higher deficit repair contributions under a shorter recovery period, following an investigation by the Pensions Regulator.
The watchdog took action over what it felt was an imbalance between the funds contributed to the Southern Water Pension Scheme and the level of dividends paid to shareholders in 2016 and 2017.
As a result, Southern Water will pay £50m more into the pension fund over a shorter recovery plan period. Initial payments will be up to twice as much as before, with every subsequent payment also higher.
Rosalind Connor said the report can be seen as useful guidance for schemes. “The more that the Regulator can tell us what their thinking is, the better,” she said.
Rosalind said high-profile collapses and select committee scrutiny mean the Regulator may feel under some pressure to highlight successes in its investigations or regulatory action.
“They were very keen in the early years not to tell the outside world whether they’ve got people to change their approach, because the perception was that if you didn’t broadcast it, you were more likely to get people to work alongside you if they were comfortable it wasn’t going to go out into the public domain,” said Rosalind.
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