Under the Pension Act 2004, the Pensions Regulator (TPR) was given extensive powers to protect the interests of members and reduce the risk of claims on the Pension Protection Fund (PPF).

Following a hearing on 12th and 13th June 2007, TPR has finally used its powers and published two determination notices indicating it intends to issue a Financial Support Direction (FSD) on a Bermuda based passenger transport and marine container leasing company. The FSD will be issued within 28 days from the date of determination notices. During this 28 day period an appeal can be made.*

The FSD may be issued if the company comes within TPR's definition of a "service company", a company within a group whose turnover is solely or principally derived from charges made for the provision of employee services to other companies in the group or an employer which is "insufficiently resourced".

Once the FSD has been issued, the company concerned must comply and put in place financial arrangements. If it fails to do so, TPR can issue a contribution notice meaning that if wind-up was triggered, they would be liable for the buy-out deficit, currently combined at over £90m.

TPR Chief Executive, Tony Hobman, said: "Our anti-avoidance powers are significant and, as we have always stressed, we will use them proportionately and where reasonable. In this case, we concluded that the issue of a Financial Support Direction was appropriate and justified."

Earlier in the year, TPR used its powers to prohibit David John Foster from becoming a trustee of any trust-based pension scheme after judging him unfit to perform the role.

This, coupled with TPRs recent determination gives a clear indication that TPR will exercise its powers when it has to in order to identify and reduce risks.

*Source:  The Pensions Regulator website 18 June 2007