Moral hazard—themes from the cases of the Pensions Regulator
Moral hazard—themes from the cases of the Pensions Regulator

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Moral hazard—themes from the cases of the Pensions Regulator
  • What are the moral hazard powers?
  • Moral hazard determinations
  • Clearance applications
  • Deals involving regulated apportionment arrangements (RAAs)
  • Emerging themes
  • Plans to extend the Pensions Regulator’s moral hazard powers

FORTHCOMING DEVELOPMENT: On 11 February 2019 the DWP published its response to the consultation ‘Protecting Defined Benefit Pension Schemes—A Stronger Pensions Regulator’ which followed the government’s White Paper ‘Protection Defined Benefit Pension Schemes’ (19 March 2018). The response set out the measures to be adopted to strengthen the powers of the Pensions Regulator (TPR), including making changes to the Contribution Notice (CN) and Financial Support Direction (FSD) regimes. After a first failed attempt to legislate on these measures (through the Pension Schemes Bill 2019), the Pension Schemes Bill 2020 was reintroduced in Parliament on 7 January 2020. This 2020 Bill (which differs from its 2019 predecessor only in minor ways) aims to make the planned amendments to the CN regime (including creating two new grounds on which CNs can be issued, namely the employer insolvency test and the employer resources test), although not the planned changes to the FSD regime (which would have created a streamlined, single-stage process, and extended the scope of the FSD regime to capture controlling shareholders). Furthermore, the intention is for TPR to review its clearance guidance to clarify its expectations as to what employers and trustees should do. For more information on the detail of the CN changes outlined in the 2020 Bill,