On the go: Intervention by the Pensions Regulator has resulted in First UK Bus increasing deficit repair contributions to its defined benefit scheme from £18m to £33m a year.
According to a case study published on its website, the regulator began its supervisory relationship with the bus operator in November 2019 looking at the scheme’s governance and administration processes, including its funding and risk management approach.
The engagement with the scheme — which has almost 26,000 members and had a £270m deficit in April 2019 — coincided with its triennial valuation, where a new recovery plan was agreed that would lead to the scheme being fully funded within the next 10 years, TPR stated.
The watchdog noted that the supervisory relationship marked a new way of interacting with the scheme, which “has been overwhelmingly positive for engagement and outcomes”.
TPR stated that this can be seen not only in the improved funding of the scheme, but also in the way members relate to their pension. Trustees are now sending a newsletter to members, “giving details of the scheme’s financial status and including clear examples of how small increases in contributions could make a huge difference to their retirement”.
Nicola Parish, TPR’s executive director of frontline regulation, noted that this case is “a fantastic example of how our relationship supervision work can significantly improve scheme funding and governance standards”.
“Relationship supervision allows us to develop relationships with schemes, monitor them more closely, outline our expectations and prevent problems from developing in the first place so that savers are safeguarded,” she concluded.
