Business

MPs widen pensions inquiry to include defined benefits

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Following a damning report on the collapse of BHS and its pension fund, MPs are to widen their inquiry to study defined benefit pensions in general.

The Work and Pension Committee will ask whether the Pensions Regulator should be given extra powers.

Lesley Titcomb, the chief executive of the Pensions Regulator, will be called to give evidence.

She will be asked to explain whether she could have used her existing powers to block the sale of BHS.

Sir Phillip Green sold BHS to Dominic Chappell with a "gigantic" black hole in its pension fund, according to last month's report by MPs.

As a result 20,000 BHS pensioners face a lower income in retirement.

"The lessons of BHS must be learnt," said Frank Field MP, the chair of the Work and Pensions Committee.

"This may mean strengthening the powers and resolve of the Pensions Regulator to act early, quickly and firmly, with those who seek to avoid their pension responsibilities.

"It is important, however, that businesses that are run reputably and responsibly are not put under undue restriction."

Risk of failure

The inquiry into defined benefit pensions - where retirees get a guaranteed level of pension, based on their years of service - will also look at other companies with big deficits in their pension schemes, such as Tata and BT.

A recent funding update found the BT pension scheme had a current deficit of £9.9bn, one of the largest of any British business.

The inquiry will examine:

  • the adequacy of the regulator's powers
  • the level of its resources
  • the skills of its staff
  • whether it should be more proactive

Lesley Titcomb previously told MPs that she learnt about the sale of BHS through the newspapers.

The Pensions Regulator has also been criticised for having too light a touch in relation to master trust schemes, involving auto-enrolment pensions.

The BBC revealed earlier this year that hundreds of thousands of employees are paying into such pension funds, some of which may be at risk of failure.

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