Pensions regulation under pressure from a government failing on the economy

Starved of a genuine strategy for economic growth, the government is again looking for a favour from the world of pensions. The best example is the establishment of the Pensions Infrastructure Platform by several large pension schemes, to direct additional funds into infrastructure investment, at the government’s behest. This is a worthwhile endeavour by the schemes themselves, but the government is desperate that it also makes up for its own failings on capital investment.

We now have another example, with the Pensions Bill likely to compel the Pensions Regulator (TPR) to consider how its defined benefit pension funding regime can ‘minimise any adverse impact on the sustainable growth of an employer’.

This is a hugely controversial measure. Pension scheme members have a strong interest in the sustainability of their employer, but it is the reference to sustainable growth that is problematic. Will TPR be asked to consider the employer’s need to generate profits for shareholders over their duty to make contributions into their pension schemes?

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Image: Dave Gibbs