Pension watchdog wants to relax pension scheme repair rules

By Sarah Mortimer

LONDON (Reuters) - Britain's pension watchdog wants to allow companies more time to plug funding gaps in their final-salary linked schemes, a move that would give employers more scope to invest and grow.

In the first signal of legislative changes it intends to make later this year, the Pensions Regulator said it aims to relax rules requiring companies to plug these deficits as soon as they are identified.

Pension scheme deficits have been exacerbated by low interest rates and repeated rounds of quantitative easing.

Having to use cash reserves to plug the gaps soon as they are identified has made it difficult for companies to invest elsewhere. It has also reduced the cash on which the Treasury can charge corporation tax.

The proposals will be debated by Parliament in the summer, and the Pension Regulator official approach to pension funding will be laid out in its code of practice due this autumn.

To see the full statement from The Pension Regulator, see http://www.thepensionsregulator.gov.uk/doc-library/statements.aspx#s8142.

(Reporting by Sarah Mortimer; Editing by Louise Heavens)

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