4 May 2021: Argyll opens Leeds office

17 Jun 2020: TPR updates Contribution Deferral guidance

5 Aug 2019: TPR's tougher stance on recovery plans

7 Mar 2019: TPR’s Annual Funding Statement a game-changer

7 Dec 2018: DWP publishes superfund consultation

26 Jun 2017: TPR agrees settlement with Coats

30 Apr 2017: PM promises TPR M&A powers

28 Feb 2017: TPR agrees settlement with Sir Philip Green

9 Nov 2016: Brexit so far

8 Nov 2016: BHS ripple effect

2 Nov 2016: Sir Philip Green sent warning notice

1 Nov 2016: Argyll Financial becomes Argyll Covenant

3 Oct 2016: Tata Steel update

2 Jun 2016: BHS to be liquidated

29 Mar 2016: Tata plans sale of UK Steel

3 Sep 2015: TPR takes dim view of late valuations

13 Aug 2015: New TPR covenant guidance

28 May 2015: Contribution notice in Carrington Wire case

22 Dec 2014: Third warning notice for Guinness Peat

18 Dec 2014: New PPF rules for Asset-Backed Contributions

19 Aug 2014: TPR announces Lehman Brothers settlement

10 Jun 2014: TPR publishes revised funding code

27 Mar 2014: EC postpones holistic balance sheet

20 Mar 2014: PPF announces new insolvency risk model

17 Mar 2014: PPF guarantees harder to certify

7 Feb 2014: Argyll Financial submits consultation response

2 Dec 2013: Regulator publishes new draft funding code

19 Nov 2013: Asset-backed contributions guidance from TPR

22 Oct 2013: FSD warning helps MF Global scheme buyout

10 Sep 2013: TPR supportive of Kodak restructuring

31 Jul 2013: Schneider Electric acquires Invensys for £3.4bn

24 Jul 2013: Supreme Court overturns FSD super-priority

8 May 2013: Support for employers in TPR's Statement

8 Nov 2016: BHS ripple effect
Parliament’s investigation into the well-publicised plight of BHS and its pension scheme is likely to cause ripples throughout the pensions industry over 2017. 

The select committees over the Summer grilled not only Sir Philip Green, the other corporate players and the pension trustees, but also the Pensions Regulator itself.  TPR drew criticism from the committees for its efficacy in handling the BHS investigation, accepting that TPR derives its powers from Parliament in the first place.  There were subsequently calls for TPR to be granted stronger powers in dealing with sponsors.

What can we expect to see in 2017 therefore?

We have already seen an increase in covenant interest from existing and new trustee clients, wary of the ‘BHS effect’ and not wanting to have to defend their funding decisions in a similar manner to the BHS trustees.  While it seems unlikely that most trustees will be subject to the rigours of a select committee there is heightened awareness of the need to behave robustly.  Trustees asking their covenant adviser to double-check their decision-making in the context of what their employer can reasonably afford can provide significant additional comfort.

As for TPR, despite BHS it seems unlikely in our view that TPR will be granted sweeping new powers, particularly as the last tweak to its powers was arguably a softening of its stance with a new statutory objective announced in 2013 to allow for employers’ sustainable growth plans.   The economy is perhaps still too fragile, particularly in light of the EU Referendum result, to bear strong new enforcement powers for TPR.

Nevertheless recent comments by TPR Executive Director, Andrew Warwick-Thompson, point towards a strengthening in the Regulator’s approach when dealing with sponsors.  In particular we are told to expect the Regulator to move far earlier from education and enablement to enforcement.

In short, 2017 is perhaps going to be a period of heightened sensitivity from the Regulator.  For valuations agreed over the next 12 to 18 months trustees and employers should not be surprised to get more pushback from TPR where it feels sponsors could do more.

As for the BHS Scheme itself, the recent issuing of Warning Notices to Sir Philip and others could potentially precipitate a deal before Christmas.

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