Earlier this year, we wrote about the new criminal offences under the Pension Schemes Act 2021: avoidance of employer debt and the offence of conduct risking accrued scheme benefits. These came into effect on 1 October 2021, with some transitional provisions where the act, failure to act or course of conduct took place (or started) before that date. The Pensions Regulator has just issued final guidance on how it intends to use these powers.
The Pensions Regulator also has power to issue civil financial penalties of up to £1 million in similar circumstances.
Contribution notices and information gathering
Other significant provisions effective from 1 October 2021 include:
- the wider circumstances in which the Pensions Regulator can impose a contribution notice, so if the "employer resources" or "employer insolvency" tests are satisfied certain connected or associated third parties could be made liable to make a contribution to the pension scheme, and
- the extension of the Pensions Regulator's information gathering powers, with penalties for breaches as well as for providing false information in certain circumstances.
New notifiable events
It is proposed that (possibly from April 2022), two new events – material sales and the granting/extending of security in priority over the pension scheme – will be notifiable to the Pensions Regulator. A new requirement to provide a statement to the trustees and the Pensions Regulator about certain proposed corporate activity has also been suggested.
Here to help
Consulting with advisers to consider the possible impact of these measures on proposed corporate transactions, including restructurings, will remain key. To discuss in more detail, please reach out to a member of our Employment, Pensions & Mobility or Restructuring & Insolvency teams.
