MPs have today issued a call for evidence for an inquiry on the state of defined benefit (DB) pensions, with the roles of the pensions watchdog and lifeboat in particular thrust under the microscope.
The inquiry by the Work and Pensions committee was sparked by its recent investigation into the pensions situation at BHS. The retailer had a blackhole in its pension schemes worth £571m when in collapsed back in April.
Today's call for evidence is, in particular, looking for further details about DB pensions regulation by The Pensions Regulator, the sustainability of the Pensions Protection Fund (PPF) and the fairness of the PPF levy system and the roles and powers of pension scheme trustees.
Frank Field MP, chair of the committee, said:
The lessons of BHS must be learnt. This may mean strengthening the powers and resolve of the Pensions Regulator to act early, quickly and firmly with those who seek to avoid their pension responsibilities.
It is important, however, that businesses that are run reputably and responsibly are not put under undue restriction. Ultimately, defined benefit schemes must be placed on a sustainable footing.
The report the MPs recently published into BHS' struggles set out plans for this new inquiry into define benefit pensions regulation on a wider scale.
"The future of occupational pension schemes is perhaps the greatest challenge facing longstanding British businesses," the report read. "In an environment of rising longevity, interest rates close to zero and intense international competition, defined benefit pension liabilities accumulated in a different age can appear burdensome and unaffordable.
"It should not be forgotten that these liabilities are promises of deferred pay to employees."
Welcoming the report, Lesley Titcomb, chief executive of The Pensions Regulator, said: "We have already written to the committee setting out our preliminary views on which aspects of the regulatory framework could be improved and we look forward to providing further input later this year."
Meanwhile, a PPF spokesperson said: "We welcome the inquiry and any discussion which looks to improve the defined benefit pension scheme landscape."
The JLT Employee Benefits Index recently revealed pension deficits at UK private companies reached a record high of £390bn at the end of July, rocketing £80bn in the last two months alone.
Meanwhile, Kate Smith, head of pensions at Aegon described the inquiry as "timely given the spotlight on growing pension black holes and the BHS debacle".