The Pensions Regulator (TPR) is the body responsible for regulating workplace pension schemes in the UK. Where an employer operates a defined benefit trust-based pension scheme for its employees, legislation requires it to notify TPR if certain events occur. Some events must always be notified, while others only need to be notified in certain circumstances.
Events which employers must always notify
- Receipt of advice that the employer is wrongfully trading or knowledge that there is no reasonable prospect of the employer avoiding insolvent liquidation.
- Conviction of a director or partner for a dishonesty offence.
- A decision which results or is intended to result in non-payment of a debt due to the pension scheme.
- A decision to cease business or the cessation of business in the UK.
Events which employers only need to notify in certain circumstances
- Breach of a banking covenant.
- A decision to relinquish control or relinquishment of control of an employer.
Employers must notify these events if either or both of the following apply:
- The scheme was not fully funded on the Pension Protection Fund basis at its most recent valuation.
- The trustees have had to report a non-payment under the schedule of contributions to TPR in the previous 12 months.
Notifications must be made in writing and as soon as reasonably practicable after the employer becomes aware of the event. Failure to notify can result in a fine of up to £5,000 for an individual and up to £50,000 for a company or partnership.
In October, a Pension Schemes Bill was laid before Parliament which would have introduced a more onerous notifiable events regime, including a penalty of up to £1 million for failure to comply with the regime. The Bill did not complete its passage through Parliament before Parliament was dissolved ahead of the December 2019 general election. It is likely that the Bill will be re-laid at some point, but exactly when and in what form is unknown. In addition to complying with the existing notifiable events regime, employers should therefore monitor developments in this area.
TPR has published guidance on the notifiable events regime which employers may find helpful.