The Pensions Regulator in the U.K. will create a "fast track" to help pension plans set funding targets and recovery plans under a new funding code, delegates heard Friday during the third day of the annual Pensions and Lifetime Savings Association's conference in Manchester, England.
David Fairs, executive director for the regulatory policy, analysis and advice at The Pensions Regulator, which is set to be granted additional powers under the new Pension Schemes Bill, outlined during a panel discussion how TPR intends to implement the new funding code.
Mr. Fairs said the TPR plans to provide a "fast track" option under the new funding code, in which sponsoring employers will be able to set their own targets as approved by the regulator.
"We hope little scrutiny will be attractive to schemes," Mr. Fairs added, noting that these pension plans' executives will themselves set the date for when the plans' deficit will be eliminated. The regulator will not set standard targets.
However, pension fund executives speaking on the same panel were concerned about TPR's plans to introduce shorter recovery plans and deficit repayments under these rules.
Some 42% of executives attending the panel voted in a poll that similar expectations are already in place under current regulation and the regulator is only adding more scrutiny.
Jenny Condron, chairwoman of the Association of Consulting Actuaries, warned: "Time frame is not that short. Pension funds already have long-term objectives. Some will never get to that low-risk place."
Rob Orr, head of technical and communications at SAUL Trustee Co., London, which has £3.6 billion ($4.6 billion) in assets, warned there is a conflict in the regulator's standardized approach and pension plans' individual circumstances. "Some sectors can have a long-term viability of covenant," under which some employers' long-term funding ratio is solid, Mr. Orr noted.
Responding to the fellow speakers' arguments, Mr. Fairs said "genuinely strong" employers will be positioned to cover the deficit in a shorter period of time.