UK and US pension regulators have signed an agreement to share non-confidential information on how companies handle their pension funds across borders.
The US Pension Benefit Guaranty Corp has tied in with the Pensions regulator, that oversees UK defined benefits pension schemes, and the Pension Protection Fund, that pays compensation to pensioners if an employer’s scheme goes bust.
Under the agreement, the each regulator has access to data, intelligence, and other records except confidential financial information relating to companies running pension schemes.
Pension Protection Fund chairman Lawrence Churchill said the agreement “sends a clear signal that there is a high level of co-operation between the various national institutions charged with protecting retirement incomes in an era when many sponsoring employers have a global presence.”
The object of the pact is to monitor multinational company pension funds so regulators in the US and UK do not have to pay out compensation to pensions if company assets have been transferred leading to a shortfall in funds.
A second aim is stopping tax avoidance as the UK regulators and US regulator have the benefit of tax information sharing treaties with numerous countries – for instance, the US regulator has recently signed such a treaty with Swiss tax authorities to share information and intelligence that will now be available to UK regulators.
Governments are sending a clear message to companies and individuals that the days of tax evasion are numbered and that the system is progressively tightening to capture tax cheats.
“We are not trying to make a treaty,” said PBGC Acting Director Vincent Snowbarger. “We’re trying to layout our understanding of the kind of information that we both feel comfortable in providing one another.”
Snowbarger said the agencies want to be “cautious about how much we are perceived to have locked ourselves into some kind of agreement that would be objectionable” to US other agencies and what businesses might perceive this as being.
Other US agencies, such as the Commodity Futures Trading Commission and Securities and Exchange Commission, have also linked with other international regulators.
