The Regulator today published a section 89 report (ie use of regulatory powers) on its involvement with the Docklands Light Railway Pension Scheme. The valuations for that scheme for 2009 and 2012 were considerably overdue their 15 month statutory deadlines so the Regulator issued a warning notice with a view to exercising its funding powers (ie compel the trustees to obtain skilled person reports on the covenant and funding).
It appears that the Trustees had a power to demand contributions under the Trust Deed and Rules and they were ultimately able (with encouragement from TPR) to take the statutory employer Serco Ltd to court and obtain appropriate funding. A settlement was reached in November 2014 whereby the deficit revealed by the 2012 valuation (£36.1m) would be cleared by January 2018. TPR’s powers were never exercised.
Argyll comment:
The Regulator’s funding powers tend to get less publicity than the anti-avoidance powers so a timely reminder to trustees and employers that they exist. To quote TPR Chief Exec Lesley Titcomb from the accompanying press release:
“Our action in this case demonstrates we will work closely with schemes to address non-compliance but also that we have a low tolerance for late actuarial valuations. As late actuarial valuations can create uncertainty and could increase risks to both the scheme and the employer, we will consider whether to use our powers to protect member outcomes and ensure employers meet their obligations.”
