Sir Philip Green was criticised by politicians regarding his ownership of BHS. He later paid £363m towards the company’s pension schemes.The proposals follow the high-profile pension scandals involving high-street department store chain BHS and engineering and outsourcing firm Carillion.Both went bankrupt with their DB schemes in deficit by hundreds of millions of pounds. Senior staff in both cases were subsequently criticised by politicians for neglecting their pension funds.ConsolidationThe DWP said it would consult on a “legislative framework and authorisation regime” to facilitate consolidation of DB schemes.It specifically cited work by the Pensions and Lifetime Savings Association (PLSA) on the topic.The UK pension funds’ industry body last year proposed the creation of so-called ‘superfunds’ to facilitate consolidation, particularly for small schemes. However, the white paper stopped short of granting TPR the power to veto mergers or acquisitions, an idea promised by prime minister Theresa May in the run-up to last summer’s UK election.The DWP also decided against allowing schemes to change their measure of inflation or “simplify” their benefits, despite many industry commentators arguing that such measures could save schemes money. Frank Field, chair of the Work and Pensions Select Committee, has led calls for punitive fines for negligent scheme sponsors since 2016.The paper set out potential requirements for commercial consolidator vehicles – primarily regarding funding levels and a requirement for trustees to take legal, actuarial and covenant advice before agreeing to detach a scheme from the sponsoring employer.Graham Vidler, director of external affairs at the PLSA, said: “We are pleased to see that the white paper takes forward the work on consolidation developed by the PLSA’s DB Taskforce over the past two years.“The best support for a DB scheme is a strong employer and we believe the current flexible funding framework remains the right approach”Lesley Titcomb, TPR“There is a growing body of evidence that consolidation in its many guises could provide the benefits of scale for those schemes that choose to consolidate.“We look forward to working with DWP on this issue going forward as we work to strengthen DB pensions and give more members a better chance of receiving full benefits.”TPR would also be given additional powers to oversee consolidator funds, the DWP said.Among other notable ideas put forward for legislation or consultation, the DWP proposed:Reviewing the regulated apportionment arrangement process to “make improvements” to the system of separating schemes from employers;Toughening TPR’s information gathering powers;Revising the scheme funding code to support TPR’s enforcement;Working with the regulator to promote awareness of consolidation options; andIntroducing a requirement for DB scheme chairs to report to the regulator after every three-year actuarial valuation.Lesley Titcomb, chief executive of TPR, welcomed the proposed new powers for her organisation, saying they would “enable us to be clearer about what we expect from employers in relation to scheme funding and tougher where a scheme is not getting the funding it needs”.“The best support for a DB scheme is a strong employer and we believe the current flexible funding framework, which allows employers to balance growth with meeting pension benefits, remains the right approach and we will aim to retain this flexibility in any new approach,” Titcomb added.The full white paper is available here.Industry viewsDespite the government’s emphasis on criminal sanctions, the paper left many industry commentators underwhelmed…“We applaud the extra powers to be given to TPR, including the ability to fine company bosses. However, these will need to be exercised with care and discretion. Hopefully the powers will strike home where necessary. It is not clear whether the regulator will need extra resources to carry out these additional duties, which are unlikely to receive legislative approval before 2019-20 at the earliest.”Simon Taylor, actuary at Barnett Waddingham“What we have is a bundle of small-scale measures that are probably modestly helpful changes, though we doubt whether they will make that much difference in practice. Under its breath, the government seems to be acknowledging that the current regime strikes a reasonable balance between protection of benefits and commercial enterprise. It’s just a shame that it couldn’t make much more of that in the white paper.”Alastair Meeks, pensions partner at Pinsent Masons“This is a missed opportunity to build a pensions system that’s fit for the future. It’s good that employers won’t be able to slash pension rises without members’ consent. But ministers are doing nothing to stop the closure of good-quality pension schemes. Millions of workers across the country will still worry about poverty in retirement.”Frances O’Grady, general secretary of the Trades Union Congress“We are glad to see that the government has been looking at the relationship between good corporate governance and good outcomes for pension scheme members. The Pension Regulator’s ability to regulate the system effectively depends on effective governance of both pension schemes and the companies which stand behind them.”Graham Vidler, director of external affairs at the PLSA Company directors who neglect to fund their defined benefit (DB) pension schemes could face criminal charges under proposals put forward by the UK government today.In its keenly anticipated white paper, Protecting Defined Benefit Pension Schemes, the Department for Work and Pensions (DWP) said it would legislate to introduce a new criminal offence “to punish wilful or grossly reckless behaviour of directors” in relation to a DB scheme.In addition, the department pledged to grant The Pensions Regulator (TPR) more powers to fine directors and companies “to tackle irresponsible activities that may cause a material detriment to a pension scheme”.The paper also included plans for a tightening of the “voluntary clearance” system, whereby companies can inform TPR when significant corporate activity might affect a DB scheme. The DWP said it would review the “whole framework” to ensure it covered all relevant activity and was sufficiently clear.
By Lonnie WheatleyPEORIA, Ariz. (Nov. 1-2) – After making his first visit to Canyon Speedway Park, Mike Van Genderen is probably already looking forward to his second. Van Genderen made the most of the 1,500 mile trek from Newton, Iowa, by taking the $5,000 winner’s share in Saturday night’s 40-lap IMCA Xtreme Motor Sports Modified main event that put the wraps on Canyon’s 25th annual Desert Classic special. The payday was Van Genderen’s biggest in the open-wheeled division and put him on the ballot for the 2014 Fast Shafts All-Star Invitational. He raced from his front row outside starting position and led every circuit before taking the checkered flag.Cautions slowed the early going but the last half of the feature stayed green. Van Genderen used the top line and led by a straightaway much of the distance before getting slowed by heavy lapped traffic in the late going. While negotiating that traffic on the final circuit, Van Genderen send sparks flying as he got into the front stretch wall at the flag stand.That gave the 16th starting Dustin Boney the opportunity to close, and he was on Van Genderen’s back bumper before the leader pulled away heading down the final straight. Boney had to settle for second while another Show Me stater, Jeremy Payne, captured the show position. Track champion Jason Noll and Tim Ward rounded out the top five. Nov. 1 Results Qualifying feature – 1. Mark Stewart; 2. Anthony Madrid; 3. Mike Van Genderen, 4. Tyler Mecl; 5. Jason Noll; 6. Jeremy Payne; 7. Bryan Schultz; 8. Justin O’Brien; 9. Jesse Sobbing; 10. Jay Foster; 11. Hunter Marriott; 12. Guy Norton; 13. Tim Ward; 14. Chris McCurdy Jr.; 15. Cody Center; 16. Keith Krenklis; 17. Dustin Boney; 18. Nate Warren; 19. Jeff Stafford; 20. Mason Daughters.Heat winners were Van Genderen, Madrid, Krenklis, McCurdy and Mecl. “B” feature winners were Schultz and O’Brien. Nov. 2 ResultsFeature – 1. Van Genderen; 2. Boney; 3. Payne; 4. Noll; 5. Ward; 6. Stewart; 7. Mecl; 8. Sobbing; 9. O’Brien; 10. Marriott; 11. Madrid; 12. Center; 13. Daughters; 14. Norton; 15. George Fronsman; 16. Krenklis; 17. McCurdy; 18. Schultz; 19. Scott Drake; 20. Jay Foster. Heat winners were Ward, Drake, O’Brien and Daughters. “B” feature winners were Boney and Sobbing.