The Pensions Regulator (TPR) has issued guidance to trustees, employers and their advisers on potential issues on employer related investments by occupational pension schemes.

The statement comes after recent amendments to the Occupational Pension Schemes (Investment) Regulations 2005, which from 23 September 2010 resulted in the limits on employer related investments (ERI) applying to more assets (eg moneys in a bank account), as well as the removal of exceptions relating to certain types of investments (eg some collective investments) (see our previous bulletin).

In recognising the complex nature of funding arrangements between schemes and their employers, TPR has set out a summary of the factors that it will take into account when considering whether to exercise its powers in respect of a potential breach of the ERI restrictions. It has also provided simplified examples for ways in which trustees might try to reduce the risk of breaching the amended ERI restrictions.