Whitehall pressed on pension superfunds regulation
The government is facing fresh doubts over legal protections for defined benefit pension schemes, as so-called superfunds angle to swallow them up.
In a recent letter, pensions minister Guy Opperman was unable to say for sure that rules for pension superfunds would be in an upcoming pensions bill.
The letter came in response to the Work and Pensions Committee’s chair, independent MP Frank Field, who was demanding clarity over how Whitehall hopes to regulate pension superfunds.
Pension superfunds aim to collect several corporate pensions schemes and run them more cheaply and efficiently than the companies that set them up.
However, there are only two superfunds on the market, neither of which are active yet, with no bespoke regulatory regime in place.
Field is trying to stop the government from allowing superfunds from taking on any pension schemes until concrete rules are established.
The chief executive of industry watchdog the Pensions Regulator (TPR) has told the committee that if a superfund took on a defined benefit scheme it would do so under voluntary regulation.
In a letter to the Department of Work and Pensions (DWP), Field called on Whitehall make sure TPR has the resources to carry out its regulatory function.
This comes in light of the committee’s long-expressed concerns about “critical failings in the current regulatory regime” and TPR’s use of its existing powers.
Field said: “Why won’t the government act when it knows what can happen to life savings even when there is regulation?
“The Queen’s speech must outline government action on this front, with full regulation of superfunds, if we are not to see more workers robbed of their due entitlement as happened at BHS and British Steel.”