Regulator Clarifies Clearance

Today (Monday 10 September 2007), the Pensions Regulator published for consultation draft revisions to its guidance on clearance statements in respect of the potential use of its 'moral hazard' powers. The guidance was originally published back in April 2005 and the proposed revisions reflect the Regulator's experience to date and clarify various issues raised over the last couple of years.

The main changes contained in the draft clearance guidance are:

to encourage a move away from a reliance on prescriptive tests in deciding which events should be considered for clearance, to a more principles-based approach;

greater clarity in respect to the level of financial mitigation that trustees should be looking for;

simplification of the classification of corporate events, with removal of Type B and Type C events;

a fuller description of scheme-related events (such as compromises and apportionment) that could be Type A events;

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