The current financial crisis should not deflect the UK from its new pension scheme regime, the pensions regulator David Norgrove told the National Association of Pension Funds annual conference in Glasgow yesterday.

The current financial crisis should not deflect the UK from its new pension scheme regime, the pensions regulator David Norgrove told the National Association of Pension Funds annual conference in Glasgow yesterday.

"The cry for light touch regulation is currently less than it was, given the problems in the financial markets," Norgrove said. "Equally we need to be careful not to over-react to calls for stronger regulation and a shift from a risk-based approach."

The regulator said large pension schemes appeared to have a relatively limited direct exposure to so-called toxic assets and to derivative trades with counterparties.

"On this basis the main issues faced by pension schemes seem likely to be the more general fall in asset values first, then emerging pressures on company covenants and ultimately solvency."

Although Norgrove said he was "no better placed than anyone else to predict how great the stress is likely to be", the UK approach was "unique in its balancing of scheme funding with affordability".

New recovery plans, he said, would be expected "to reflect current economic conditions in terms of what is reasonably affordable".