The Pensions Regulator

Regulator issues warning to trustees over scheme returns

Ref: PN06-03
8 February 2006

The Pensions Regulator has now collected more than 7,000 scheme return forms from defined benefit schemes, and is requesting that those outstanding be returned.

Since June 2005, the regulator has issued approximately 9,000 scheme return notices to defined benefit schemes with five or more members, and the majority have now been returned. However, some have either not yet replied, or have sought assistance without returning their forms and it is these schemes the regulator wishes to hear from. Excluding those schemes that have wound up or are winding up, there are approximately 900 schemes who have failed to return their forms.

The regulator wishes to remind these schemes that they have a statutory duty to complete the scheme return. Those schemes that ignore the scheme return notice requirements entirely will be in breach of the Pensions Act 2004 and the regulator has the power to issue an improvement notice to trustees that do not comply.

The regulator is looking to gain the attention of trustees who:

• have received a scheme return but have not replied, or
• are experiencing difficulties with its completion, or
• represent a defined benefit scheme with five or more members and have not received a scheme return.

Those who fit into these categories should call the regulator's helpline on 0870 606 3636 or email the return directly to: schemereturns@thepensionsregulator.gov.uk

For further information on the scheme return process, please view our website at: www.thepensionsregulator.gov.uk/trustees/
guidance/providingInformation/index.aspx.

Editor's notes

1. The scheme return is an information gathering tool that collects occupational pension scheme information such as scheme status, type, membership and funding. Trustees are also required to provide details of their involvement in the scheme and to compile information on scheme advisers, administrators and employers.
2. The scheme return process is designed to provide an in-depth information database for the regulator, from which it can build an accurate picture of the schemes it regulates. It will act as a central source of information for the regulator and, where appropriate, the Pension Protection Fund.
3. In March the regulator is due to issue scheme returns to two - four member defined benefit schemes. Between March and May, defined contribution (DC) schemes with twelve or more members, and some smaller DC schemes will also receive their scheme returns.
4. Schemes that receive scheme returns for the first time will be expected to submit data via a new internet based service due for release in March 2006. This service should simplify and streamline the scheme return process.
5. An improvement notice is a power the Pensions Regulator can use to encourage compliance. It can prescribe what action needs to be taken and by whom to mitigate any risks caused by breaches of pensions legislation. Failure to comply can result in a financial penalty.
6. 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 replaced Opra which no longer exists.
7. The new powers of the Pensions Regulator include the ability to:
   • collect more detailed scheme information;
   • 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.

The Pensions Act 2004 also imposes a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator.