The number of companies applying to the UK Pensions Regulator for clearance to go ahead with events – such as mergers and acquisitions – that could affect their pension schemes fell by nearly a quarter last year.
This “worrying trend” was likely to be exacerbated by the recent issue of new draft clearance guidance from the regulator, according to law firm Wedlake Bell.
Clive Weber, head of pensions at Wedlake Bell, said the drop in notifications from 269 in 2005-06 to 207 a year later was due to a broadening perception that the regulator was unlikely to exercise its powers against companies.
Previous guidance, listing specific activities requiring clearance, has been replaced under the draft guidance by a broader test of an event that is “materially detrimental to the ability of the scheme to meet its pension liabilities”.
“For trustees, this new draft guidance if issued in its present form is going to make an already difficult job even harder,” said Mr Weber. It lacked clarity and failed to address practical difficulties, he said.
Published in the Financial Times, 22 October 2007