UK – Revised "marching orders" for the UK's pensions regulator should offer relief to sponsors of defined benefit (DB) pension funds, the National Association of Pension Funds (NAPF) has said.

Reacting positively to yesterday's Budget announcement that the Pensions Regulator (TPR) would receive a new statutory objective, as put out to consultation by the Department for Work & Pensions (DWP) in January, the association nonetheless warned that the as-yet-unpublished objective's wording needed to "strike the right balance".

NAPF chief executive Joanne Segars said her organisation would be keeping a close eye on how the new objective would be fulfilled, which the government said would be reviewed six months after coming into effect.

Aon Hewitt's Kevin Wesbroom also welcomed the additional objective, but stressed that the "devil was in the detail".

Segars added: "The new objective needs to strike the right balance between protecting savers' interests, helping good defined benefit pensions remain open and ensuring pension regulation does not hinder investment and growth."

Sackers lawyer Zoe Lynch expressed her surprise at the new objective, stating that the initial proposal had received a "lukewarm" reception when the consultation was first announced.

Adam Boyes, senior consultant at Towers Watson, meanwhile noted that TPR's new "marching orders" were broader than indicated in the consultation.

"The regulator commented coolly that it regulates according to the regime set by the government, so it may not be overjoyed with where the government has ended up," he added.

The consultant said a further measure announced in the Budget – the lowering of the level of corporation tax to 20% by 2015 – might even act as an incentive for companies to bring forward deficit reduction contributions, even if the regulator were to allow increased leniency from now on.

Business lobby group CBI, which had initially called for a new statutory objective last summer, unsurprisingly welcomed the move.

Director general John Cridland said: "The new obligation on the Pensions Regulator acknowledged that the huge commitment employers are making to sustain pensions for employees cannot be separated from the drive for growth."

Similarly, Hymans Robertson partner Andrew Gaches commented that TPR's current approach to eliminating deficits as quickly as possible placed a "huge burden" on sponsors, impacting a company's longer-term strength.

"A new objective allowing for the sustainable growth of sponsoring employers will shift the balance, loosening the short-term burden on companies where appropriate," he said.

Consultants, meanwhile, welcomed the Treasury's rejection of smoothing for pension liabilities, with KPMG saying it was "positive".

Barnett Waddingham's Malcolm McLean welcomed that the government listened to consultation responses regarding the "thorny issue".

"Many experts," he added, "had expressed reservations about the use of 'smoothing' in scheme funding valuations, and it seems the DWP has heeded warning of the impact that such meddling would have on a system that is by-and-large fit for purpose."

Towers Watson's Boyes also welcomed the idea of smoothing being abandoned, arguing the proposals "had a lot of rough edges", which could have inflated deficits in future by maintaining an average of the current low interest rate environment, even if these improved.

He said that this would have prolonged the pain for sponsors.

"Expectations about the future are a better guide to valuing pension liabilities than what happened during an arbitrarily selected past period," he said.

However, Peter McPherson of Capita Employee Benefits appeared disappointed by the decision to abandon smoothing.

"We support the decision not to take smoothing any further, but are of the view that the statutory funding regime requires more flexibility," he said.

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