Reporting payment failures

General code in force: 28 March 2024

Duty to report

1. Where contributions are not paid on time, and the governing body¹ or another party with a duty to report² has reasonable cause to believe that the payment failure is likely to be of material significance to us, they should send a written report of the matter to us.
2. The legal requirement to report late payments of employee and employer contributions into certain occupational and personal pensions is imposed on the ‘trustees and managers’ of the scheme. In addition, the legal requirement to report late payments of employer contributions into public service pension schemes is imposed on a ‘scheme manager’³.
3. Reports should be made to us within 14 days of the trustees having reasonable cause to believe that a material payment failure exists. Members should be notified within 30 days of the report to us⁴. When reporting to members, governing bodies should provide payment information that will enable them to understand what has been paid to the scheme and by whom.
4. Governing bodies should also identify where contributions due to be paid under the payment schedule have been received by the scheme. Members can then take steps to resolve any payment problems with their employer at the earliest opportunity (see General principles for member communications).

Materially significant payment failures

5. Payment failures that are likely to be of material significance include:
   1. where governing bodies have reasonable cause to believe that the employer is neither willing nor able to pay contributions
   2. where there is a payment failure involving possible dishonesty or a misuse of assets or contributions
   3. where the information available to the governing body indicates that the employer is knowingly concerned with fraudulently evading their obligation to pay employee contributions
   4. where the governing body becomes aware that the employer does not have adequate procedures or systems in place to ensure the correct and timely payment of contributions due and the employer does not appear to be taking adequate steps to remedy the situation
   5. any event where contributions have been outstanding for 90 days from the due date

6. Payment failures which are not likely to be of material significance include:
   1. where a payment arrangement is being met by an employer for the recovery of outstanding contributions
   2. where a claim has been submitted to the Redundancy Payments Office National Insurance Fund or the Northern Ireland Redundancy Payments Service
   3. where there are infrequent one-off payment failures or administrative errors such as where employees leave or join the scheme and those occasional failures or errors have been corrected within 90 days of the due date
   4. where payments are made in excess of the contributions due under the payment schedule
   5. where contributions are paid late but in full and within 90 days of the due date

Glossary

Contributions

Money due to be paid into the scheme. This may come from members in the form of regular or additional contributions, or from employers as regular or deficit-related contributions.

Days

References to ‘days’ means all days. References to ‘working days’ do not include Saturdays, Sundays or Bank Holidays.

Payment failure

A contribution which has not been paid in accordance with the payment schedule in full on or before its due date.

Legal references

¹ Section 111A of the Pension Schemes Act 1993 .[Article 107A of the Pensions (Northern Ireland) Schemes Act 1993] sections 49(9) and 88(1) of the Pensions Act 1995 [Articles 49(9) and 86(1) of the Pensions (Northern Ireland) Order 1995] sections 70A and 228(2) of the Pensions Act 2004 [Article 65A and 207(2) of the Pensions (Northern Ireland) Order 2005]’

² Section 70 of the Pensions Act 2004 [Article 65 of the Pensions (Northern Ireland) Order 2005]

³ Public Service Pensions Act 2013 [Public Service Pensions Act (Northern Ireland) 2014]

⁴ Section 228(2) of the Pensions Act 2004. [Article 207(2) of the Pensions (Northern Ireland) Order 2005] Section 111A(7A) of the Pension Schemes Act 1993. [Article 107A(7A) of the Pensions (Northern Ireland) Schemes Act 1993] Sections 49(9) and 88(1) of The Pensions Act 1995 [Articles 49(9) and 86(1) of the Pensions (Northern Ireland) Order 1995]

Related content

• Report missing payments to your workplace pension
• Contributions for DB schemes
• Maintaining contributions for DC schemes