06 June 2006
Four codes of practice from the Pensions Regulator are now in
effect.
The codes of practice are as follows:
1) Trustee knowledge and understanding.
This code sets out practical guidance for trustees on how they can
comply with new requirements under the Pensions Act 2004 - that
trustees of occupational schemes are conversant with their own
scheme documents and have appropriate knowledge and understanding
of trusts and pensions law and of the principles of funding and
investment.
Existing pension scheme trustees will have six months in which to
acquire the relevant level of knowledge and understanding. New
trustees will have six months from the date of their
appointment.
2) Early leavers - reasonable periods
The code outlines the rights, relating to new provisions introduced
in April 2006, of members leaving occupational pension schemes
early, without the right to a paid-up pension, with more than three
months, but less than two years' pensionable service. The new
provisions allow members to either take a refund of their
contributions, if any (less any tax/contributions equivalent
premium, if appropriate) or a transfer value to another
arrangement.
This code of practice gives guidelines for trustees in relation to
the requirement to notify, those members, within reasonable periods
of their rights and how they can exercise them and give effect to
the member's chosen option.
The code also sets out the regulator's views as to what constitutes
'reasonable periods'.
3) Reporting late payment of contributions to occupational money
purchase schemes
This code of practice gives guidelines for trustees of occupational
money purchase schemes on reporting late payment of contributions
to the Pensions Regulator and to scheme members.
Trustees will only be required to report late payment of
contributions where the late payment is likely to be of material
significance to the Regulator. Trustees should use their judgement
to assess whether they need to make a report - the code provides
practical examples of when trustees should and should not
report.
4) Reporting late payment of contributions to personal
pensions
This code of practice gives guidelines for managers of personal
pensions (including stakeholder schemes) where there is a direct
payment arrangement, on reporting late payment of contributions to
the Pensions Regulator and to employees. Managers will only be
required to report late payment of contributions where the late
payment is likely to be of material significance to the Regulator.
Scheme managers should use their judgement to assess whether they
need to make a report - the code provides practical examples of
when managers should and should not report.
All four codes of practice can be found on the regulator's
website:
www.thepensionsregulator.gov.uk/codesAndGuidance/codes/inForce/
