Transatlantic regulatory authorities formalise closer co-operation

A Memorandum of Understanding between the UK Pensions Regulator, the Pension Protection Fund and the American Pension Benefit Guaranty Corporation was signed this morning (Wednesday) in Washington, USA, to encourage and enable best practice in protecting benefits.

The MoU enables the sharing of market intelligence to develop shared understanding in an increasingly globalised market, reflecting the strict domestic controls which protect restricted information collected in the performance of regulatory functions.

The signing occurred during a series of meetings between the UK authorities which, in addition to the PBGC, included representatives of the White House National Economic Council, the US Treasury and the World Bank, and focussed on discussions around the economic downturn, the shift in the global pensions landscape and forthcoming reforms to introduce auto-enrolment into UK occupational pensions.

David Norgrove, chair of the Pensions Regulator, said: “We have worked with the PBGC since the Pensions Regulator began in 2005. This MoU formalises the position and, through exchange of thinking and best practice, will help us in our efforts to protect members' benefits.”

Lawrence Churchill, chair of the Pension Protection Fund, added: “This agreement sends a clear signal that there is a high level of co-operation between the various national institutions charged with protecting retirement incomes in an era when many sponsoring employers have a global presence.”

Vince Snowbarger, Acting Director, PBGC, said: “In today's global business world, pension regulators often face common issues that cut across national boundaries.  This agreement gives the PBGC and our UK counterparts a framework for appropriate sharing of information and co-operation in carrying out our missions.”

The MoU can be viewed at:

http://www.thepensionsregulator.gov.uk

1. The MoU is facilitated by section 82 of the Pensions Act 2004.
2. This MoU follows numerous meetings between the three parties since the creation of the authorities and aims to facilitate more co-operation between the authorities.
3. The MoU does not add any regulation and is not legally binding. It is a mechanism by which the authorities can exchange information at their discretion and nothing in this MOU compels one authority to lend assistance to the other authority.
4. The Pensions Regulator is the regulator of work-based pension schemes in the UK, with objectives to protect members' benefits, promote good administration and reduce the risk of calls on the Pension Protection Fund.
5. The Pension Protection Fund was set up under the provisions of the Pensions Act 2004 in April 2005 and is classified as a public financial corporation. It has been established to pay compensation to members of eligible defined benefit and hybrid pension schemes when there has been a qualifying insolvency event in relation to the employer, and where there are insufficient assets in the pension scheme to cover Pension Protection Fund levels of compensation.
   

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