Cost-cutting measures see PPF’s legal roster touted to Government watchdogs for same fees
The Pension Protection Fund (PPF) is embarking on the first major shake-up of its legal advisers since it was set up under the Pensions Act 2004. Those making the grade will potentially be made available to 12 regulatory bodies under the Government’s cost-cutting measures.
PPF legal chief David Taylor has launched a three-month tender process with the aim of transforming his existing 27-firm roster into a core panel of around three, plus a longer list of firms to handle insolvency matters and a final sub-panel to handle issues such as financial services regulation and debt collection.
Under an agreement signed by members of the Regulators’ Procurement Forum the successful firms will have to agree to give advice to bodies such as the FSA, the Office of the Rail Regulator, the OFT and the Civil Aviation Authority on the same terms as those agreed with the PPF.
Taylor said: “Members of the Regulators’ Procurement Forum have agreed that if any one of them has a panel [of firms] the other members can use those firms on the same terms. This is in response to the pressure on public sector spending, but it makes sense anyway.”
While the PPF is funded by levies from UK defined benefit and hybrid pension schemes, its status as a quasi-governmental organisation allows it membership of the group.
As the PPF steps in to take responsibility for pension schemes following the insolvency of their sponsoring employers, it farms out work on everything from multimillion-pound business restructurings to litigation and employment matters.
With £7.2bn in assets under management spread across numerous external fund managers, and more than 38,000 pensioner members, the fund also relies on advisers with significant investment and pensions expertise.
Taylor said that, while he expects firms pitching for the panel to quote value-for-money fees, he added that he is not looking for the “bargain basement option”.
“With the stuff we’re doing, often we are genuinely doing it for the first time,” he explained. “It’s sophisticated work and it really matters to get it right.”
The members of the Regulators’ Procurement Forum are:
The Water Service Regulation Authority
Office of the Rail Regulator
The Office of the Qualifications & Examinations Regulator
The Postal Service Commission
The Pensions Regulator
Utility Regulator (NI)
Civil Aviation Authority
Financial Services Authority
Office of Communications
Office of Gas & Electricity Markets
Office of Fair Trading
Pension Protection Fund