20 July 2005 - Memorandum of understanding between dwp, regulator and ppf published
A tripartite Memorandum of Understanding has been drawn up between the Department for Work and Pensions (DWP), the Pensions Regulator and the Pension Protection Fund, and is published today on each organisation’s website. The Pension Protection Fund and the Pensions Regulator were established by the Pensions Act 2004 and began operating in April 2005.
The Memorandum establishes a trilateral framework for co-operation between the DWP, the regulator, and the Pension Protection Fund in pension regulation and member protection. It sets out the role of each public body, and explains how they will work together towards the common objective of improving pension security. The division of responsibilities is based on four guiding principles:
- Clear accountability. Each public body must be accountable for its actions, so each must have unambiguous and well-defined responsibilities;
- Transparency. Parliament, the pensions community and the public must know who is responsible for what;
- No duplication. Each public body must have a clearly defined role, to avoid second guessing, inefficiency and the duplication of effort. This will help ensure proper accountability;
- Regular and appropriate information exchange. This will help each public body to discharge its responsibilities as efficiently and effectively as possible.
The document also stresses that while the Department has no responsibilities in the operational activities of the Pensions Regulator and the Pension Protection Fund and shall not be directly involved in them, it has a primary role in the stewardship or sponsorship of the two bodies. It will discharge this responsibility through:
- the scrutiny and approval of annual business plans;
- receiving reports on performance and outcome measurement;
- receiving financial reports; and
- exchanging information and analysis of trends and risks.
Minister of State for Pensions Reform, Stephen Timms, said:
“The publication of the memorandum reflects the Government’s policy on transparency and the accountability of public bodies. It also allows the public to see that the Pensions Regulator and Pension Protection Fund are working together to achieve both their specific business objectives and their shared strategic objective of improving confidence in pensions.”
The Chair of the Pensions Regulator, David Norgrove, said:
“We have already established close working relationships with both the Pension Protection Fund and the Department. With this memorandum, we now have a sound formal basis for the effective partnership required to achieve our objectives.”
The Chair of the Pension Protection Fund, Lawrence Churchill, added:
“Effective pension protection can best be best delivered through a culture of co-operation within a framework of clear accountability. The Memorandum of Understanding is clear evidence of our practical determination to deliver.”
Notes for Editors
- The Pensions Act 2004 established two new Non-Departmental Public Bodies, the Pensions Regulator and the Pension Protection Fund. Both organisations came into operation on 6 April 2005.
- While the relevant sections of the Act provide the overarching regulatory and legal framework that governs the operation of the Pensions Regulator and the Board of the Pension Protection Fund, the interlinked business objectives of the two organisations and the direct boundary of responsibility between them gave rise to the need for a memorandum of agreement or understanding.
- The tripartite Memorandum of Understanding appears on the following website addresses:
- www.dwp.gov.uk/publications/dwp/2005/ppf/memo-2005.pdf
- www.thepensionsregulator.gov.uk
- www.pensionprotectionfund.org.uk
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