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FOI reference - FOI 2017-01-25
Date - 25/01/2017

Request

Request 1

I am requesting information under the Freedom of Information Act on The Pension Regulator's (TPR) anti-avoidance investigations.

Please state on how many occasions TPR, under its anti-avoidance powers, has privately issued (ie not publicly disclosed) 1) Warning Notices, 2) Contribution Notices, and 3) Financial Support Directions.

For each of these cases, please briefly outline the a) outcome of each case, ie whether it went to the Determinations Panel and / or the upper tribunal and / or was settled, b) the amount of money targeted by TPR and c) the amount of money recovered.

Request 2

I am requesting information under the FOI Act on TPR's anti-avoidance investigations.

Pursuant to my recent FOI request please disclose a 1) breakdown of the external costs of each of the following cases, beyond just external legal costs, and 2) the total external costs:

  1. Bonas
  2. Desmond
  3. Carrington
  4. Lehman Brothers
  5. Nortel
  6. Box Clever
  7. Sea Containers
  8. BHS
  9. Coats

Response

I can confirm that we hold information falling within the scope of your request. However, some of the information is already in the public domain, where this is the case I have provided website links where you can find the information.

Information we are able to supply

Request 1

Under our anti-avoidance powers we serve Warning Notices (WN) to targets and other directly affected parties to advise of the intention to exercise our powers. The WNs and / or the fact that we have issued them are not normally made public and this is true in the 17 occasions where WNs have been issued in these anti-avoidance cases. In the BHS case, the exceptionally high public interest meant we felt it was appropriate to issue a press release confirming WNs had been issued, although the WNs themselves are not publicly available.

The decision to issue Contribution Notices (CN) and Financial Support Directions (FSD) is usually made public after the Determinations Panel reaches its decision. In most cases this will be under section 89 of the Pensions Act 2004 powers via the publication of the Determination and often also through publication of a report, both of which are published on our website.

For your information from the 17 cases in question there have been CNs issued in relation to two cases and FSDs in relation to another two. The remaining cases are either ongoing or were settled following the issuing of the WNs.

With regard to your question about value targeted and the amount recovered it might be helpful if I explain the differences between a CN and an FSD. A CN requires a specified amount of money to be paid into a pension scheme by an individual or a company. An FSD is a requirement for financial arrangements to be put in place to support a scheme, when the employer is a service company or is insufficiently resourced at the relevant time. These arrangements can include, for example where an employer is part of a group, all members of the group becoming jointly and severally liable for the pension liabilities in relation to the scheme, the holding company within the group becoming liable for the pension liabilities in relation to the scheme or an arrangement whereby financial resources are provided to the scheme.

In the case of CNs, there will be figures included in the Determinations relating to the amount initially sought by TPR’s case team in the WN as well as the amount that the Determinations Panel decide should be imposed. The actual recovery of this debt on behalf of the scheme will then be for the trustees or the PPF to enforce as appropriate. The final outcome of each case will differ depending on whether the case is referred to the Upper Tribunal and / or whether settlement is reached.

In seeking the issue of FSDs there is no target figure sought and the purpose of using this power is to secure appropriate financial support for the scheme in question. Once an FSD has been issued, a proposal for financial support is then put forward by the targets and TPR decides whether or not to approve it.

I have listed below the cases that are now in the public domain and provided links to the publications relating to each case. The publications will give you details of the cases and the outcomes, where available. There are a further two cases in which WNs were issued that were settled prior to the Determinations Panel reaching a Determination. One case sought the issue of a FSD, the other a CN. The FSD case did not seek a specific sum (for reasons explained above) and settled upon payment of £13.25 million. The CN case settled upon payment of the entire sum sought in the WN (£2.35 million).

Sea Containers
Nortel
Desmond and Sons
Bonas
Lehman Brothers
Great Lakes
Box Clever
Carrington Wire
MG Rover
MF Global
Brunel
Staveley
Silentnight
Coats
BHS

Request 2

Please see below the table listing a breakdown of costs to external legal and external non-legal spend on the requested cases, which are inclusive of VAT:

Cases External legal spend / costs External non-legal spend / costs Total spend / costs
Bonas £418,622 n/a £418,622
Desmond and Sons £1,040,041 n/a £1,040,041
Carrington Wire £370,398 n/a £370,398
Lehman Brothers £1,672,583 £264,133 £1,936,716
Nortel £2,447,501 £100,000 £2,547,501
Box Clever £807,912 £388,987 £1,196,899
Sea Containers £104,000 n/a £104,000
BHS £371,808 £993,033 £1,364,841
Coats £957,636 £287,399 £1,245,035
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