The Pensions Act 2004 introduced both the Pensions Regulator and the Pension Protection Fund (PPF). The Regulator’s ‘moral hazard’ powers can be used in circumstances when there are deliberate acts or failures to act where there is an intention to prejudice the pension scheme creditor. The PPF was established with the purpose of protecting members in the event that their sponsoring employer became insolvent, leaving a deficit in its occupational defined benefit (DB) pension scheme.
The measures contained in the Pensions Act mean it is now virtually impossible for a company to rid itself of its DB pension liabilities without incurring a significant cost. A year on, companies are considering a range of measures to offload their DB liabilities.
