Before the outbreak of Covid-19, the Pensions Regulator was emphasising its tougher approach to pensions regulation: Clearer, Quicker, Tougher. This focus is borne out in the Pension Schemes Bill, with the range of extensive new powers it will afford the Regulator, and in the Regulator’s plans to introduce a new DB funding Code which (based on its initial consultation) will require deficits to be cleared more quickly and, in many cases, lead to an increase in deficit repair contributions. But:
- Is this tougher approach still the right one given the impact of Covid-19 on DB schemes and sponsors?
- How should the Regulator balance its desire to ensure schemes reach their long-term objective with the need to promote the sustainable growth of sponsors who are experiencing financial difficulties as a result of the pandemic?
- And how is all of this impacted by the recent changes to the UK insolvency regime?
- consider how the Regulator’s approach to pensions regulation needs to change in light of the economic impact of Covid-19, and
- discuss how sponsors and trustees should respond to the Regulator’s new powers and the recent changes to the UK insolvency regime, particularly where sponsors are facing financial difficulties.