2 March 2005 - Johnson welcomes new era for occupational pensions – new challenges ahead for the Pensions Regulator and Pension Protection Fund
A new era in occupational pensions was heralded today by Secretary of State for Work and Pensions, Alan Johnson, as he welcomed the imminent opening of the Pension Protection Fund (PPF) and The Pensions Regulator.
Speaking today at a press conference to PPF Chair Lawrence Churchill and Pensions Regulator Chair David Norgrove, Alan Johnson said that the creation of these two new bodies would mean added security for over 10 million members of final salary schemes and help establish confidence in occupational pensions amongst both employers and employees.
Alan Johnson said:
“For over 10 million people in occupational pensions in Britain the new Pension Protection Fund and Regulator will provide a new level of security for pensions. The PPF will end the scandal of people losing their pension when their company goes bust and the new regulator will put workers and pensioners first by proactively routing out fraud and mal-administration.”
“For good employers the PPF will enhance the value of the pension they offer while the Regulator will ensure that well run schemes are not over-burdened by red tape while acting to help those schemes that get into difficulty.
“People will only save in pensions if they have confidence in them. In David Norgrove and Lawrence Churchill I believe we have the right high calibre team to meet that challenge and ensure that pensions become safer for generations to come.”
Chair of the Pensions Regulator, David Norgrove, said;
“As the first Chair of the new Pensions Regulator, I am keen to help tackle one of the major issues we face. I intend the regulator to be an active and authoritative presence in the pensions industry. By working to protect members’ benefits and focussing on schemes most at risk, we can contribute to building trust in work-based pensions.
“With wider powers to put problems right, and an emphasis on raising standards in scheme administration, I am confident we will be a strong, positive influence on the way companies and trustees run their pension schemes.”
Chair of the Pension Protection Fund, Lawrence Churchill, said:
“The Pension Protection Fund has an important role to play in the changing pensions landscape. It will, for the first time, provide a level of security for members of defined benefit and hybrid occupational pension schemes, giving them reassurance that meaningful compensation will be paid even if their employer goes bust.
“2005 is going to be a challenging year as we establish the Pension Protection Fund as an accurate, efficient and responsive compensation service. I am confident that through working in partnership with industry and the Regulator we will rise to this challenge. Together we will deliver real security in retirement for millions of pension scheme members in the UK.”
Pensions Minister, Malcolm Wicks, said:
“When we first published the Pensions Act, the Pension Protection Fund and the Pensions Regulator were central to our aim of restoring confidence in occupational pensions and bringing security to scheme members. It is to the eternal credit of everyone involved that in what is a relative short period of time, both organisations are now in place and ready to help us meet the challenges that lie ahead.”
The Pensions Regulator and the Pension Protection Fund will begin operations on Wednesday April 6th.
The Pensions Regulator will have wider powers and increased flexibility to ensure that pension schemes offered by employers are well run. Its statutory objectives are to:
- Protect the benefits of members of work-based pensions – whether occupational or personal;
- Reduce the risk of situations arising which may lead to calls for compensation from the Pension Protection Fund; and
- Promote, and improve understanding of, the good administration of the schemes it regulates.
The Pensions Regulator will take a risk-based approach to regulation. It will look closely at pension schemes, assessing levels of risk and will take action to reduce or remove risks. The regulator will put in place information gathering procedures including a scheme return and a notifiable events framework. Combined with an extended whistleblowing regime, these will allow it to obtain the information it needs to assess whether a scheme is at risk.
The Pensions Regulator will work to protect the Pension Protection Fund from employers who intend to side-step their pension obligations.
The Pension Protection Fund has been designed to pay compensation to members of eligible defined benefit pension schemes, when there is a qualifying insolvency event in relation to the employer, and where there are insufficient assets in the pension scheme to pay Pension Protection Fund levels of compensation.
Notes for editors
- The Pension Protection Fund and The Pensions Regulator were part of the Pensions Act that received Royal Assent on 19 November 2004.
- The Pension Protection Fund will be based in Croydon, Surrey.
- Further information is available on the website www.pensionprotectionfund.org.uk
For press enquiries: Paul Reynolds: 020 7712 2240
Mobile: 07899 968 552
- The Pensions Regulator will be based at: Napier House, Trafalgar Place, Brighton, BN1 4DW. www.thepensionsregulator.gov.uk
For press enquiries:
Serena Mitchell 01273 648436
Jessica Goodwin 01273 648436
Nick Edmans 01273 627648
Press office mobile 07752 031175DWP Press office media enquiries: please contact Stewart Todd
Press office: 020 7238 0866
Out of hours: 07659 108 883
Public enquiries: 020 7712 2171