The Pensions Regulator
Pensions Regulator was created by the Pensions Act 2004, replacing OPRA, the Occupational Pensions Regulatory Authority from 6 April 2005. The role of the Pensions Regulator is to regulate work-based pension schemes with key objectives of protecting the interests of scheme members, the promotion of good administration and reducing the risk of claims on the Pensions Protection Fund.
In order to meet its objectives, the Regulator has a number of powers which broadly fall into three categories, investigative powers; the power to put things right; and the power to prevent to employers avoiding their pension obligations.
Investigative Powers
Amongst the Regulator's powers is the ability to obtain information it decides will help them best support a pension scheme. This ranges from requiring a pension scheme to complete a return requesting certain information to the ability to issue a notice requiring reports on a scheme to be provided. If necessary, the Regulator can obtain a warrant from a justice of the peace to enter premises and seize documents that are relevant to their work.
The power to put things right
Depending on the circumstances of the problem, the Regulator can take certain action to correct matters. These powers include:
- Issuing improvement notices to individuals or companies, or a third party notice, requiring specific action to be taken within a certain time.
- The power to recover unpaid contributions.
- The issue of a 'freezing order', to prevent a scheme from winding up. This could be done for example where the Regulator considers it to be in the interests of members.
- The ability to disqualify trustees they do not consider to be fit and proper persons for the role and the ability to appoint trustees to a pension scheme.
- The ability to impose fines.
- The ability to prosecute certain offences in the criminal courts.
Acting against avoidance
If the Regulator believed an employer was deliberately attempting to avoid their pension obligations, and consequently increasing the risk of a claim on the Pension Protection Fund they may issue any of the following:
- A 'contribution notices' which can direct a person to pay a specified sum to the trustees or manager of a pension scheme.
- A 'financial support direction', which requires a person or persons to put in place financial support for a pension scheme.
- A 'restoration order' if the Regulator believes a transaction has taken place at an 'undervalue'. If that were the case the order would have the effect of restoring the position that would have applied if the transaction had never happened.
- To help pension schemes comply with the law, the Regulator has produced guidance and Codes of Practice, giving practical information on compliance and conduct.
For further information on the Pensions Regulator visit: www.thepensionsregulator.gov.uk.
