The Pensions Regulator (TPR) has published its settlement policy, outlining its approach to negotiation and concluding statements of regulatory or civil enforcement action, and in turn providing further "clarity" for pension scheme trustees.

The policy confirmed that the regulator’s high-level aim for any settlement is that it should offer “a fair and appropriate outcome having regard to the circumstances of the case and our statutory objectives”.

It also emphasised that each case will offer its own “unique challenges and circumstances”, explaining that as a result of this, an acceptable settlement for one case may differ to another, even if the same regulatory power is being used.

The regulator stated that it will balance any proposed settlement outcome against what might be achieved by continuing enforcement action, including the risk of prolonged periods of legal challenge in the tribunals/courts, and the costs, delay and uncertainty this can bring.

Additional relevant factors highlighted by TPR include the protection of member benefits and the Pension Protection Fund (PPF), the position of relevant affected parties, the long-term impact of the proposal, and the potential for behavioural change.

The Association of Consulting Actuaries (ACA) has welcomed the “clear policy statement”, with ACA chair, Patrick Bloomfield, stating that "whilst there isn’t anything unexpected in the policy, it is helpful to have the clarity of what TPR will consider and the outcomes TPR wants to achieve".

He continued: “It's particularly interesting that TPR wants to see behavioural change, to improve the general levels of awareness and compliance in the industry.

“That can be a good thing, if well targeted at the handful of bad apples that undermine saver confidence in many well-run pension schemes.

“I’m optimistic that TPR’s policy will encourage trustees and employers who need to set something straight to come forward with sensible, balanced proposals that resolve their issues satisfactorily and expeditiously.

“It’s in everyone’s interests for TPR to be clearer and quicker, to keep costs down and let UK business get on.”

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