The regulator maintained its commitment to educating and enabling the pensions community through a series of thematic campaigns focused on risks affecting defined benefit (DB) and defined contribution (DC) schemes, and raising standards of governance and administration of trust-based schemes. The year also saw an increase in the regulator's casework, with more than 30 anti-avoidance cases being investigated at the end of March 2010. These included cross-border insolvencies and complex restructurings.
The regulator's chair David Norgrove said:
"The past two years have seen huge pressures on private pensions. Trustees and employers have had to work more closely than ever to secure member benefits whilst allowing employers to play their part in the recovery. We have emphasised the flexibility in the funding regime - whilst making it clear that funding targets must be set prudently.
"A recent review of our risk-based approach, by the Better Regulation Executive and National Audit Office, confirmed that the regulator has adopted an effective and proportionate approach. It's vital we continue to build on this during the coming year."
Acting chief executive Bill Galvin added:
"2010-11 looks likely to be our busiest year since our inception in 2005. We are involved in an unprecedented number of difficult and complex cases and are seeing a further increase in potential avoidance activity.
"Vital work continues on designing and building a robust compliance regime to ensure that employers meet their new duties from 2012. We are also focusing on risks faced by DC schemes which will be the vehicle into which most new members will be auto-enrolled, and will be setting out our thinking in more detail later in the year.
"With an increasing workload and in an environment of constrained public expenditure, we will continue to target our resources at the areas of greatest risk to members, and to reduce the risk of calls on the Pension Protection Fund."
The report provides extensive information on the regulator's work over the course of 2009-2010:
- A strong focus on raising standards of record keeping ahead of employers' new duties to automatically enroll staff - announcing we would be recommending specific targets for standards of common data and carrying out scheme audits.
- Free workshops on DB funding, internal controls and record-keeping, attended by over 1,500 industry representatives.
- In order to improve communication at retirement, the regulator encouraged trustees to follow good practice by reviewing documentation provided to members, including raising awareness of the open market option.
- The expansion and revision of the code of practice on Trustee Knowledge and Understanding.
- New modules relating to buy-outs and buy ins on the Trustee toolkit, which now has over 35,000 registered users.
- Casework during the period led to recoveries of £35m of previously misappropriated scheme funds. This was as a result of working in conjunction with the Serious Fraud Office, HM Revenue & Customs and the Financial Services Authority.
- During the year, four individual trustees and four corporate trustees were prohibited - this compares with one trustee being prohibited in the previous four years.
- Powers to suspend trustees to more than 100 DC schemes were used, safeguarding over £30m of scheme assets.
- Regulatory teams considered over 2,500 cases during the period. Of these, more than 2,000 involved the scrutiny of recovery plans for defined benefit schemes.
- Further development of the Exchange system for online submissions of information to the regulator was carried out. Recovery plans can now be submitted electronically, along with notifiable events, winding up and breach of law reports, and levy payments.
- All of these activities and interventions were delivered within the regulator's 2009/2010 budget of £27.4m.
In addition, the regulator also refreshed the design and content of its website - tailored to be user-friendly for employers, individuals, pension professionals and trustees and to improve the effectiveness of our communications with these stakeholders.
The Annual report and accounts 2009-2010 is available on The Pensions Regulator's website:
http://www.thepensionsregulator.gov.uk/docs/annual-report-and-accounts-2009-2010.pdf
Kind regards
Communications
The Pensions Regulator
communications@thepensionsregulator.gov.uk
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