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Employer  >  Trustee Zone  >  OPS Matters  >  The Regulator stands firm

The Regulator stands firm

Way back in June 2007, we told you that the Regulator had used its considerable powers for the first time and issued Sea Containers Ltd, a Bermuda based passenger transport and marine container leasing company, with two Financial Support Directions (FSDs). Have a look back to issue 9 to see what this all meant.  

The appeal

As part of the process, Sea Containers had the right to appeal to the Pensions Regulator Tribunal which they exercised and a hearing was set for 5 to 13 March 2008. Importantly, on 17 December 2007, at an interim hearing requested by Sea Containers, the Tribunal found against them on 3 points.

Financial support

In a surprise move, Sea Containers withdrew its appeal on 31 January 2008. The Regulator’s Determination Panel (who decides on the use of TPR’s powers) acted quickly and on 5 February issued a FSD to Sea Containers.

What happens now ?   

Essentially, Sea Containers has 30 days from 5 February to put in place financial support for its 2 final salary pension schemes for its UK subsidiary. If Sea Containers fails to put in place financial support within prescribed timescales, TPR can issue a Contribution Notice for a specific sum up to the amount of the full statutory debt, reported to be around £130m .*

Food for thought

TPR has demonstrated its willingness to use its considerable powers to protect the benefits of pension scheme members. In future, even overseas companies with UK subsidiaries will need to consider if corporate transactions will be damaging to the pension scheme and perhaps would be well advised to contact TPR or use their Clearance procedures first.

* source : Telegraph, 7 February 2008