The Pensions Regulator

Regulator uses powers to appoint independent trustees to Telent pension scheme

Ref: PN07-15
19 October 2007

The Pensions Regulator today confirmed that, following a request from the Trustee Board of the Telent (formerly Marconi) Pension Scheme, it has successfully applied to use its powers to appoint three independent trustees with immediate effect.

The decision to appoint independent trustees was taken under a special expedited procedure set out in the Pensions Act 2004 that allows the regulator to appoint independent trustees without issuing a Warning Notice.

The regulator’s Determination Panel considered the application at a hearing this morning.

Editor's notes

1. In 2006, Telent (then called Marconi Corporation plc), as principal employer, participated in the sale of the majority of the group’s businesses to the Ericsson Group. As part of the clearance application to the regulator, Telent undertook to set aside a sum for the protection of pension benefits under the company’s pension scheme. Part of this sum was set aside in an escrow account.
2. On 25th September 2007, Co-Investment No.5 LP Incorporated (CILP), whose general partner is advised by Pension Corporation, announced an offer of 600p per share for Telent. CILP has now acquired 29% of Telent’s shares. CILP is a special purpose vehicle of Pension Corporation.
3. The Chairman of the Trustee Board of the GEC 1972 Plan (the Telent pension scheme) wrote to the Pensions Regulator on 18th October expressing a number of concerns and asking the regulator to use its powers to appoint an independent trustee.
4. The Pensions Regulator Determinations Panel is the decision making body of the regulator. Where the regulator wishes to exercise its powers it is required to provide a submission to the panel. A decision is made by the panel as to whether the use of the power is appropriate and a determination notice is used setting out the reasons for the decision. Our website provides more information on the panel and the determinations process.
5. The Pensions Regulator is the regulator of work-based pensions in the UK, with wide-ranging and flexible powers under the Pensions Act 2004. The powers of the regulator include the ability to:
   
   • Collect detailed scheme information
   • Issue improvement notices and third party notices, enabling the regulator to ensure that problems are put right
   • Issue a Financial Support Direction or Contribution Notice
   • Prohibit trustees who are judged not fit and proper to carry out their duties

   The Pensions Act 2004 also imposes a statutory obligation on ‘whistleblowers’ to report suspected breaches of legislation to the regulator.