Enhancing your skills set
14 August 2006
I have been seconded to the Pensions Regulator for six months, working as a solicitor in the corporate risk management team. This team deals with the application of the moral-hazard powers under the Pensions Act 2004 and the decision to grant clearance for a wide range of corporate transactions. I am an associate in the corporate recovery department of Herbert Smith and, before my secondment, I specialised in insolvency and restructuring transactions. Although I had some experience of the Pensions Act from working on the Heath Lambert restructuring, I was worried that I lacked raw pensions knowledge.
At the regulator each clearance application is dealt with by a team of three people - a case manager, who is in charge of running the case and has good pensions knowledge, a business analyst and a lawyer. As a result, there is good peer support and I have been able to pick up the issues on the job.
The regulator deals regularly with complex, high-profile, high-value corporate transactions, often with very short deadlines, and in my experience has a commercial approach and responsiveness to corporate deadlines.
But it is not just the high-profile cases that are important to the regulator. It is sometimes easy to forget that, to the individual member, their pension rights are no less important in a scheme of five members than in a scheme of 5,000. One of my colleagues suggested to me that a good way to motivate yourself was to imagine an ordinary member of the scheme sitting in with you on every meeting and phone call. This certainly reminds you of the importance of what you are doing.
Since the Pensions Act 2004 is a relatively recent piece of legislation, each case has the potential to raise new issues that require new and innovative approaches. As a result work at the regulator is never routine and the intellectual challenge is at least equal to that of working at a City firm.
As well as analytical skills, communication and negotiation skills are very important. On clearance applications the regulator communicates with the trustees and the scheme's sponsoring employer, and it is necessary to explain the clearance process to scheme advisers, who are often experiencing the process for the first time. As part of this process the regulator sometimes assists in negotiations between the trustees and the employer, encouraging them to reach agreement.
In my first week at the regulator I had conference calls debating complex points of law with partners at City firms and negotiating multimillion-pound pension contributions with senior directors; and this was by no means unusual. The regulator has guidelines for escalating decisions on large cases, but the team on the ground plays an important role in the decision-making process, and it is often your job to decide whether or not to provide clearance on major corporate deals.
The regulator also has an important educational function and this has proved to be one of the most enjoyable features of my time on secondment. The corporate risk management team regularly takes queries from potential applicants and their advisers about the clearance process and the new legislation. On a larger scale, there has been a series of roadshows around the country where case studies were presented to trustees, employers and their advisers. These presentations finished with a question-and-answer session with London-based advisers on the regulator's powers and on interpretation of the Pensions Act 2004. Indeed, fielding these questions from professional advisers probably counts as one of the most challenging experiences I have faced at the regulator.
All in all it has been an enjoyable experience and I've developed many new skills as well as increasing my knowledge of occupational pensions and the role of the regulator.
Matthew Lorimer, secondee, Pensions Regulator