The Pensions Regulator

Pensions Regulator issues Notifiable Events code of practice

Ref: PN05-19
30 June 2005

The Pensions Regulator has today issued its code of practice on Notifiable Events. This is the second code of practice issued by the Pensions Regulator, following Reporting breaches of the law issued in April this year.

The Notifiable Events code provides practical guidelines on how employers, trustees and managers of defined benefit pension schemes can carry out their statutory duty to notify the regulator of events that may increase the risk of claims on the Pension Protection Fund.

The Pension Protection Fund, which was set up under the Pensions Act 2004, aims to help members of defined benefit pension schemes in cases where an employer becomes insolvent and there are insufficient funds to pay the expected levels of benefit.

One of the Pensions Regulator’s statutory objectives is to reduce the risk of calls on the Pension Protection Fund, and the notifiable events framework is designed to reduce this risk by acting as an early warning system of possible problems with a pension scheme or an employer.

Trustees or scheme managers must report scheme-related events, where there may be a potential impact on scheme funding. Employer-related notifiable events, which are designed to provide an indication of where there may be a problem with an employer’s solvency or commitment to the pension scheme, must be reported by employers.

The Pensions Regulator has issued Directions that set out particular circumstances where the duty to notify does not apply, in cases where there is no significant risk to the Pension Protection Fund.

Notification is a legal obligation. In the event of failure to notify, the Pensions Regulator has a number of steps it can take. The regulator may provide education and assistance to trustees or employers. However, in more serious cases, we can fine individuals up to £5,000 and companies up to £50,000 for failing to carry out their duty.

To view the Notifiable Events code of practice, visit: www.thepensionregulator.gov.uk

Editor's notes

1. The Notifiable Events regulations have been in force since April 2005. Now that the code of practice has been issued, the notifiable events framework is complete.
2. The Notifiable Events code of practice outlines the statutory requirement on employers, trustees and scheme managers of PPF-eligible defined benefit schemes to notify certain events that may impact the funding of a scheme, an employer’s solvency or an employer’s commitment to the pension scheme.
3. Once an event is notified, the Pensions Regulator will respond where appropriate according to the nature and seriousness of the event.
4. Codes of practice are not statements of the law. However they do have evidential value, meaning they will be taken into account by a court or tribunal where relevant.
5. The Pensions Regulator has been established as the new regulator of work-based pensions in the UK, with wider and more flexible powers under the Pensions Act 2004. It has replaced Opra which no longer exists.
6. The new powers of the Pensions Regulator include the ability to:
7. • collect more detailed scheme information;
   • impose a statutory obligation on ‘whistleblowers’ to report suspected breaches of the legislation to the regulator;
   • issue improvement notices and third party notices, enabling the regulator to ensure problems are put right;
   • freeze a scheme that is at risk, while the regulator investigates; and
   • prohibit trustees who are judged not fit and proper to carry out their duties.