Amendments to the Corporate Insolvency and Governance Bill have been laid out to address industry concerns over the potential impact of the bill on pension schemes.

The amendments aim to ensure that both the Pension Protection Fund (PPF) and The Pensions Regulator (TPR) take a "key role" following an insolvency, and that the interests of a pension scheme are represented in any company recovery plans.

Some measures focus on section A39 of the bill, clause 8, which looks at the replacement of a monitor or appointment of an additional monitor, and who the monitor must notify “as soon as reasonably practicable”.

The amendment will see two sub-clauses inserted, which specify that if the company is or has been an employer in respect of an occupational pension scheme, that is not a money purchase scheme, it must notify TPR.

Furthermore, where the company is an employer in respect of such a pension scheme that is an eligible scheme within the meaning given by section 126 of the Pensions Act 2004, it must notify the PPF.

A number of similar amendments, including to section A8 and A17, will also require firms to notify the PPF and TPR where moratorium comes into force, is extended, or comes to an end.

Further amendments, such as to section A44 of the bill and A49A, will see the PPF given the same rights to challenge the monitor or the directors as the trustees or managers of certain pension schemes.

An amendment to section A31 will also ensure that courts cannot give permission for the disposal of any property or asset which has been pledged to the company’s defined benefit pension scheme, unless the PPF has given prior permission.

Other new measures outlined would see new delegated powers introduced, the explanation and reasoning for which was outlined in an accompanying supplementary memorandum.

The memorandum highlighted a number of measures, such as changes Clause 1 and A50A, which aim to balance the interest of pension scheme trustees, as custodians of the scheme, and the PPF, as an “ultimate guarantor” of the member's benefits.

Changes to schedule 9 paragraph 901HA would also see the introduction of delegated powers, which were justified in order to ensure the interests of pension schemes remain protected.

Pensions Minister, Guy Opperman, stated: "The measures in the Corporate Governance and Insolvency Bill are widely supported and will help companies through the Covid-19 emergency by giving firms essential breathing space to seek a rescue – ultimately, preserving jobs and livelihoods.

"We’re now extending the bill so that both the PPF and TPR will be able to play a key role in ensuring that the interests of pension schemes are fully taken into account in any restructuring or rescue of a sponsoring company."

Industry experts had previously raised concerns that the bill could dilute the amount available to both individual pension schemes and the PPF, urging the government to make amendments.

The PPF stated yesterday that it had been working closely with the government through a working group to address these concerns and ensure the security of scheme members.

Commenting on the amendments, PPF CEO, Oliver Morley, added: "We’re pleased that government has recognised the importance of the PPF’s role in protecting the interests of pension schemes, their members and our levy payers in insolvency proceedings.

“The amendments now brought forward are important, not least because they make sure we continue to have a seat at the table and can work to influence the outcome and mitigate the risks for ourselves and those we stand to protect."

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