Over the past year, the Government has been reviewing the powers that the Pensions Regulator (TPR) holds. Their aim? To ensure the Pensions Regulator can get involved earlier, obtain the right information and amend any errors when changes are made to an employer’s pension scheme.
Now, more than ever, it’s vital that trustees are up to date on their responsibilities and the actions they need to take.
That’s where we come in. We’re always keeping up with the latest developments in the Pensions Regulatory environment. And that means we can give you timely updates when you need to be aware of any changes or take action.
We’ve summarised the changes to the Pensions Regulator’s powers below. Have a look through, get yourself up to speed, and if you have any questions about how they might impact your scheme, we’re only a phone call away.
Notifiable Events Framework
There are two new events that are now notifiable to the Pensions Regulator:
- The sale of a material proportion of the business or assets of a scheme employer which has funding responsibility for at least 20% of the scheme’s liabilities
- The granting of security on any debt to give it priority over debt to the scheme.
The Government have also said they’ll be working with the Pensions Regulator to ensure items are reported as early as possible. The earlier they’re notified, the more likely it is to be beneficial to the scheme in question.
Declaration of intent
The declaration of intent has been confirmed as a requirement. It has to be made by the planner of the corporate transaction (i.e. the sponsoring employer) and addressed to the trustees and the Pensions Regulator. These corporate transactions include:
- The sale of a controlling interest in a sponsoring employer
- The sale of the business or assets of a sponsoring employer
- The granting of security on a debt to give it priority over debt to the scheme.
There’s no timescale for when this should be sent, yet. But the Government have confirmed they’ll be working with the Pensions Regulator to finalise one in the near future.
New criminal and civil penalties for compliance failures have been introduced, too:
- Wilful or reckless behaviour in relation to a pension scheme – this carries a maximum penalty of 7 years’ imprisonment and/or an unlimited fine.
- Failure to comply with a contribution notice – the maximum penalty for this is an unlimited fine.
The new civil offences are:
- Failure to comply with a financial support direction
- Failure to comply with the notifiable events framework
- Failure to comply with requirements for a declaration of intent
- Knowingly or recklessly providing false information to trustees.
Each of these carries a maximum fine of £1m.
To wrap it all up
Both the Government and the Pensions Regulator are hopeful that these increased powers will give them the authority to take action when needed, be more efficient, and be more effective.
The Pensions Regulator issued a statement following the announcement of the new powers, commenting: “The vast majority of scheme sponsors and trustees already do the right thing and we’ll be helping them further by delivering clearer funding standards and a revised Defined Benefit (DB) Code of Practice”.
So, despite the increased powers, you can rest assured the necessary guidance will be there to enable trustees to stay compliant. And if needed, we’ll be there to keep you updated and talk you through it.