Recently there seems to have been quite a flurry of activity at The Pensions Regulator (TPR). This article summarises what's been going on.
Sea Containers withdraw appeal against FSDs
In July 2007 we noted Sea Containers' appeal against two financial support directions (FSDs) issued by a TPR Determinations Panel. On 6 February 2008, TPR announced that this appeal had been withdrawn. Sea Containers appears to have thrown in the towel after failing to persuade the Pensions Regulator Tribunal that it was entitled to disclosure of a slew of documents, many not directly concerning their own case and some protected by legal privilege.
Sea Containers Limited, as parent company, must now provide financial support for two pension schemes belonging to its London-based UK subsidiary Sea Containers Services Limited by 6 March 2008. If the Financial Support Directions are ignored, TPR may issue a Section 47 Contribution Notice for a specific sum. A statutory debt then exists which can be pursued through the civil courts. (Pensions Act 2004 ss. 43 - 50).
This is the first time that FSDs have been issued. TPR has shown it has teeth and will bite. When it fired the first warning shot on 19 October 2006, some commentators doubted TPR's judgement in selecting an overseas company as its first target for FSDs. However, it is yet to be seen whether any money actually will be paid. The problem is that four days before TPR's warning notice, Sea Containers entered Chapter 11 administration under bankruptcy proceedings in the US. Creditors may argue in the US courts against payment.
Clearance guidance
In September 2007, we noted that TPR had issued draft guidance to clarify clearance procedures. The consultation period ended on 2 November 2007 but we have yet to see the definitive document. Although TPR has issued no timetable, Aries understands we may expect to see the final guidance published around the end of March 2008.
Wind up guidance
A tripartite regulatory statement agreed between PPF, DWP (in respect of the FAS) and TPR will be issued next Monday, 3 March, and at the same time TPR will publish a consultation document on 'good practice' guidance on avoiding delays.
Update 3 March
These documents duly appeared, accompanied by a third consultation document on the regulation of schemes in wind-up and in a PPF assessment period. A key expectation is that pension scheme trustees ensure that the key activities of winding up, or passage through the PPF assessment period, are completed within no more than two years.
These consultations close on 15 April 2008.
Aries Members login for information on other TPR consultations: