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LONDON-U.K. pension advisers contend that new regulations designed to protect occupational pension plans are so onerous that they will deter the formation of new plans and put the advisers out of business.

The Pensions Act 1995, promulgated in the wake of the Maxwell scandal in which the former press baron swindled his companies' pension funds of millions of pounds, became effective April 6. On the same day, a new government agency, the Occupational Pensions Regulatory Authority, began regulating pensions.

Although the new law generally has been welcomed as offering greater protection for members of occupational pensions, the complexity of the accompanying regulations worries pension administrators and advisers.

"The pension regulations are so detailed and so prescriptive that they could deter companies from setting up occupational pensions," contends a spokeswoman for the National Assn. of Pension Funds.

Instead, she said, employers may opt to contract with insurers that would provide workers with so-called group personal pensions-which are individual pensions on a group basis-rather than a single, pooled pension program for all employees.

The NAPF acknowledges that economies of scale from such an arrangement could mean lower administrative charges for employees compared with obtaining a pension on their own. What's more, it says, employers are more willing to contribute to a group personal pension than to an individual one.

However, the NAPF warns that insurers' commission fees generally are charged in the early years of the group personal pension programs, lowering the amount contributed to the workers' pension funds. With the increasing mobility of today's workforce, employees are likely to move from one company to another-and from one plan to another-leaving a trail of small pensions with low benefits, the pension group contends.

A spokesman for the Assn. of British Insurers pointed out that having a group personal pension is better than no pension at all.

Meanwhile, the NAPF welcomed the new pension regulatory authority's move to relax the so-called "whistle blowing" provisions in the Pensions Act.

Draft provisions of the legislation had indicated that any misdemeanor by pension trustees and administrators must be reported to the OPRA, no matter how minor.

The NAPF submitted to the authority that this not only would clog the system but also would in many cases be unnecessary.

"We are pleased that OPRA has listened to the NAPF and taken on board our comments," said the NAPF spokeswoman.

At its official launch, OPRA released a guide, "Spotlight on OPRA," explaining its mandate. Although its purpose is to investigate threats to occupational pension plans from dishonesty, carelessness or individual infractions of the Pensions Act, it "will not be heavy handed with people who make small mistakes that do not involve dishonesty or deliberately ignoring the rules," the guide states.

OPRA has a wide range of penalties at its fingertips, ranging from fines to criminal prosecutions, but it says it is willing to cooperate with pension plans to solve problems wherever possible.

"We want to concentrate on schemes which have problems, by helping to put things right quickly and efficiently," the guide says. "We will not breathe down the necks of schemes which are running smoothly. If schemes are open and honest with us, it will help us target our work where it is most needed-on schemes which are secretive, do not cooperate with us and do not keep to the rules."

Copies of "Spotlight on OPRA" are available free from OPRA, Invicta House, Trafalgar Place, Brighton, England BN1 4DW; 011/44/127-362-7600