TPR tells trustees to reassure members over liquidity problems
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The chief executive of the Pensions Regulator, Charles Counsell, has urged trustees to reassure savers that defined benefit schemes “were and are not at risk of collapse”, blaming the media for causing unnecessary concern among savers.
TPR continues to meet with the Bank of England and other regulators amid the ongoing rush among schemes to shore of liquidity ahead of Friday’s end of temporary bond buying by the Bank, Counsell said speaking at the Pensions and Lifetime Savings Association in Liverpool on Thursday.
“Following recent media coverage, it’s really important to reassure savers that defined benefit schemes were and are not at risk of collapse,” Counsell said.
He acknowledged there have been liquidity issues in some of the funds and the industry has had to react quickly but said that does not mean schemes are at risk.
“Contrary to some media reports, this hasn’t meant schemes are at risk of collapse”. What is more, funding has improved, he added.
“It’s very important we get this message to savers,” Counsell urged trustees, so that they are not “spooked” into making decisions they may later regret.
Neil Fowler, a trustee of the Trinity Retirement Benefits Scheme, criticised the absence of a forceful statement from pensions industry figures in the mainstream media in the past two weeks, suggesting TPR should offer training to journalists.
The fear that savers might be scared into leaving DB schemes is particularly acute as the UK is in a cost-of-living crisis. Counsell noted TPR’s stakeholder panel of savers has reported immediate financial and psychological effects from the living squeeze.
“Some say they can no longer afford to pay in. Others are seeking access to cash,” he said. “I can't emphasise enough: we strongly advocate the importance of saving. We urge savers to maintain contributions."
As the current crisis unfolds, the regulator still has other changes to get on top of, such as large schemes reporting in line with the Task Force on Climate-related Financial Disclosures. Counsell said 23 schemes had published a report by 31 July, with TPR expecting another 50 to publish theirs shortly. The regulator is reviewing these reports and will also provide feedback to help trustees.
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