UK firms warned after regulator pledges to get tough on pension black holes

Oliver Gill
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Sir Philip Green has been in the crosshairs of the Pensions Regulator since the collapse of BHS (Source: Getty)

British firms are facing “very difficult decisions” over pension scheme shortfalls as the UK’s watchdog ramps up the use of its anti-avoidance powers.

Last week the Pensions Regulator (TPR) announced it had recovered £1bn by using its powers to claw back money from UK companies. And in its annual statement last month, it warned companies and pension trustees that they would be subject to a higher degree of scrutiny.

Meanwhile, a further £3.5m has recently been granted to the TPR to boost its compliance and enforcement work.

Read more: Pensions watchdog barks at big dividend payers

JLT Employee Benefits director Charles Cowling said there was “increasing evidence of the TPR’s willingness to flex its muscles”.

He added: “Many pension schemes will be carrying out actuarial valuations now and beginning to agree new deficit recovery contributions. Even though deficits may have improved a little in recent months, for many pension schemes they will still be much higher than in 2014 when deficit contributions were last agreed.

So, there may still be some very difficult discussions between companies and trustees over the coming months.

JLT’s latest research indicated a narrowing in Britain’s aggregate defined pension deficits. Blue chip shortfalls fell markedly in June, from £63bn to £46bn. JLT's wider all-UK private sector index of shortfalls fell from £183bn to £176bn.

Read more: Nuclear strike averted? Pensions deal to be put to the vote after election

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