Sackers Comments on Proposed Changes to Anti-Avoidance Measure

20th June 2008:

Comment from Sacker & Partners LLP:

Consultation on the Department for Work and Pension’s consultation on the “Amendments to the Anti-avoidance Measures in the Pensions Act 2004” closed today, Friday, 20 June 2008 . (Sackers has submitted a response.)

The proposed amendments are intended to enhance the Pensions Regulator’s powers “to require contributions to pension schemes when sponsor actions materially reduce the security of member benefits”. This announcement comes amidst growing Government concern over the introduction of “business models that look to sever the link between employer and scheme”, which are seen as potentially undermining the traditional employer/trustee relationship to the possible detriment of members.

Peter Murphy, partner and a specialist in pensions regulatory matters, comments: “Sackers are very supportive of the Pensions Regulator’s efforts to recognise and react to changes in the pensions market, in order to ensure that “new business models” are not detrimental to the pensions industry as a whole.

“However, we have reservations about the way in which the proposed extensions to the anti-avoidance powers are to be implemented, together with their potentially broad application. We hope that when the amendments are finalised, they will meet the legitimate concerns without imposing additional burdens on other participants across the board.”