FOI reference - FOI 2016-06-24
Date - 24/06/2016
- What notifications (of both scheme and employer 'notifiable events') were received by The Pensions Regulator (TPR) in the 10 years preceding the schemes entry into Pension Protection Fund (PPF) assessment and are you aware of any 'failure to notify' instances (especially but not exclusively concerning non-payment of debt or breach of banking covenant)?
- A fully detailed chronological list of all the trustees in the 10 years prior to entry into PPF assessment.
- When was TPR first alerted to the fact that the scheme was in difficulty, what remedial action was taken and what additional security (from the employer) was taken up? Was TPR made aware of any significant deterioration in the company's balance sheet and if so when and what enquiries and actions resulted?
- A fully detailed chronological list of all agreed 'Funding Recovery Plans'. If they were subsequently breached when did TPR become aware that they had failed and was any further remedial action taken in response?
- Has TPR at any time issued a 'section 38 contribution notice' against the company, any shareholder or board member? If so, full details of the circumstances, was it met or otherwise what was the outcome? If not, what reasons prevented it from doing so?
- Full disclosure of the events that led up to the (change of) 'Sponsoring Employer' being a company with no assets, no income and no prospect of either. A detailed explanation of how the trustees (backed by TPR's anti-avoidance powers) failed to enforce the debt on the original employer. What decisions were taken by TPR along with the discussions around the far reaching consequences thereof? Did TPR sanction the withholding of the change of sponsoring employer from the employees and members of the scheme?
Duty to confirm or deny whether TPR holds the information requested
I can confirm that we hold information falling within scope of your request. However, we are unable to supply much of the information requested for the reasons set out below.
Information we are able to supply
Of the information that you have requested, the only information that we are able to provide is in relation to your point 5: we can confirm that TPR has not issued a contribution notice to any of the parties that you mention.
Information we are not able to supply
TPR is unable to supply the rest of the information requested as this is subject to the following exemption under the Freedom of Information Act (FoIA) section 44(1)(a).
As TPR has been given strong powers to demand documents and other information from trustees, employers and others, those powers are also balanced by restrictions on onward disclosure of information obtained by TPR in the exercise of its functions. There are good reasons for this as it encourages parties to be (voluntarily) as open and transparent as possible with TPR to ensure that our powers are exercised properly and in light of all the relevant facts.
The information you have requested is ‘restricted information’ within the meaning of section 82 of the Pensions Act 2004 (PA04). Restricted information is defined at section 82(4) as: ‘information obtained by the Regulator in the exercise of its functions which relates to the business or other affairs of any person’, except for information:
(a) which at the time of the disclosure is or has already been available to the public from other sources, or
(b) which is in the form of a summary or collection of information so framed as not to enable information relating to any particular person to be ascertained from it
Furthermore, section 82(5) of the PA04 provides that it is a criminal offence to disclose such information except as permitted under the PA04. The legislation does allow for restricted information to be disclosed in certain circumstances (ie through statutory 'gateways' that are set out in the legislation), but there is no applicable gateway in this case that would permit disclosure of the information you have requested.
Whilst the FoIA is based on the presumption of releasing information, there is an exemption to disclosure under FoIA that may be relied on in respect of information which is subject to a statutory prohibition on disclosure. Section 44(1)(a) of the FoIA provides an absolute exemption from disclosure of any information if disclosure (otherwise than under the FoIA) is prohibited by or under any enactment. In this case, section 82 of the PA04 prohibits disclosure and TPR is therefore, unable to disclose the requested information.
The exemption at section 44(1)(a) is an absolute exemption and does not require a public interest assessment to be undertaken by TPR.
We do not regard the fact that we have not issued a contribution notice as information obtained by us in the exercise of our functions, and that is why we are able to give you that information in response to your point 5.
Duty to provide advice and assistance
I am mindful of the duty to provide advice and assistance to requesters, as far as it is reasonably practicable to do so.
While we are unable to provide much of the information that you have requested, as a member of the Monarch Airlines Retirement Benefits Plan you may be able to obtain information about the trustees and agreed recovery plans from the scheme administrator, whose contact details you no doubt have.
The following additional information may also be of assistance.
Firstly, I would like to be clear as to TPR’s statutory objectives. These are (in relation to defined benefit schemes) to protect the benefits of pension scheme members; to reduce the risk of calls on the PPF; to minimise any adverse impact on the sustainable growth of an employer (in relation to our powers under part 3 of the PA04); and to promote and improve the understanding of, good administration of work-based pension schemes. We do not therefore have a role in regulating the scheme’s sponsoring employers or the group to which they belong (by, for example, checking that they comply with company law, insolvency law or any other applicable law).
To allow us to fulfil our regulatory objectives in relation to the protection of benefits of members of defined benefit pensions schemes and the limitation of calls on the PPF, we have been given certain limited powers under statute. For example:
- where it appears that an employer is financially unable to support its pension scheme, TPR may consider whether it is necessary for the scheme to be wound up so as to protect the interests of the generality of members; this would usually result in the members receiving compensation from the PPF
- where it appears that an employer or persons connected or associated with the employer have engaged in some kind of activity so as to avoid its liabilities to the scheme or which affects in a material way the likelihood of members receiving their accrued scheme benefits, TPR may consider whether it can issue a Contribution Notice to the employer (or an entity connected or associated with the employer)
- where it appears that an employer does not have the resources to support its scheme, TPR may consider whether it would be reasonable to issue a Financial Support Direction to an entity that is connected or associated to the employer requiring it to offer financial support to the scheme
TPR must act in a risk-based and proportionate manner and, where concerns arise as regards the funding of a pension scheme, will discuss the situation with the employer and the trustees to assess whether a consensual resolution can be found and, if not, determine whether it has any powers at its disposal that would be appropriate to use in the circumstances.
In addition to decisions as to whether to exercise a power, TPR may also become engaged in discussions with an employer if it receives an application from the employer for it to make a determination of some sort. For example, applications may include:
- Voluntary requests for a Clearance Statement in relation to a corporate transaction. A request for clearance is not a request for approval or consent to the transaction itself but is a request that TPR confirm that it will not use its powers to issue a Contribution Notice or Financial Support Direction based on the contents of the application.
- Requests that TPR exercise its power to approve a Regulated Apportionment Arrangement (RAA) so as to allow the company to restructure and continue in business whilst the scheme enters the PPF.
For further information regarding both the clearance process and RAAs, including TPR’s approach to both, please refer to the following publications:
TPR is unable to provide you with detailed information about its involvement in respect of the plan in the period prior to its entry into PPF assessment as this would be classed as 'restricted information' under section 82 of the PA04. This is due to the fact that the information obtained by TPR was directly related to the business or other affairs of not only the employer but also the employer group, the trustee, other creditors of the employer and wider group, the purchasers and other third parties and was only obtained by TPR in the exercise of its functions. It therefore remains 'restricted information' under the PA04.