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Has TPR sought advice on how to prevent companies from engaging in asset striping activities?

FOI reference - FOI 2017-03-08
Date - 08/03/2017

Request

Has The Pension Regulator (TPR) considered or sought professional advice on how to legally prevent or discourage companies from engaging in similar transactions to those that caused the demise of BHS or other asset striping activities.

If not, is there any legal or regulatory reason why this advice has not / cannot be sought.

If yes, can you please provide the summary findings and / or key recommendations of the advice? If this information is restricted, for whatever reason, can you please provide the name(s) of the top three legal, accountancy or other advisors used, the consultancy fees paid for advice and more importantly, whether or not the advice TPR received was listed in the petition below and if so, what was the action taken and why?

Response

I can confirm that we do not hold the information requested. This is because corporate transactions are not generally within our remit. TPR only becomes involved where such corporate transactions impact negatively any pension schemes over which TPR has remit. Our powers are there to enable us to take action to protect members’ benefits in line with our statutory objective in section 5 of the Pensions Act 2004. TPR has produced two quick guides to its anti-avoidance powers and determinations process and a flowchart on the general procedures a case will follow. Please see our media guides.

To the extent that your request may be interpreted as seeking disclosure of information on whether we have sought legal advice on how to prevent or discourage employers from engaging in transactions aimed at disposing of their pension schemes, in a manner detrimental to the scheme members’ interests. The response would be that TPR does so on a case by case basis. Where appropriate, when seeking to exercise its powers in individual cases, TPR will seek advice from Counsel. We also keep our regulatory approach and policies under review in light of cases we undertake, including publishing reports and guidance where we have considered use of our powers.

Duty to advice and assist

Under the Freedom of Information Act we also have a duty to offer advice and assistance to the extent that this is reasonably expected in relation to a particular request.

The Work and Pensions Select Committee’s (WPSC) inquiry into TPR and the Pension Protection Fund published a report at the end of last year on defined benefit (DB) schemes, which looked at TPR’s remit and powers. We submitted evidence to the WPSC. The conclusions of the WPSC included recommendations regarding the process of clearance and whether it should be mandatory in some circumstances. More details can be found on the parliament website.

The recent Green Paper from the DWP is also consulting on this issue amongst others.