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Resolving overdue contributions


Early draft of the code of practice

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Published: 17 March 2021

When a payment failure is identified (see also Monitoring contributions), the governing body should contact the employer promptly and seek to resolve the overdue payment. They should attempt to recover contributions within 90 days from the due date or prescribed period having passed.

Under section 249A of the Pensions Act 2004,RS1 governing bodies of certain schemes must establish and operate an effective system of governance (see Scheme governance) including internal controls (see Managing risk using internal controls). However, there are certain exemptions.RS2

Under section 249B of the Pensions Act 2004,RS3 scheme managers of public service pension schemesRS4 are required to establish and operate internal controls which are adequate for the purpose of securing that the scheme is administered and managed in accordance with the scheme rules,RS5 and with the requirements of the law.

Governing bodies usually have flexibility when designing procedures. They can obtain overdue payments and rectify administrative errors in the most effective and efficient way for their scheme. A typical process should cover the following steps:

  • Investigate any employer failure to pay contributions.
  • Contact the employer promptly and seek to resolve the overdue payment.
  • Attempt to find out and record the cause and circumstances of the payment failure.
  • Investigate any action the employer has taken as a result of the payment failure.
  • Consider the wider implications or impact of the payment failure.
  • Consider whether the failure is part of a pattern of a systemic failure.
  • Seek to ensure that the employer resolves the payment failure.
  • Where appropriate provide members with sufficient information to enable them to raise any issues with the employer.
  • Take steps to make sure that a recurrence in the future is avoided.

Governing bodies should maintain a record of their investigation and communications between themselves and the employer. This will also inform the decision of whether a payment failure must be reported to us and members.RS6

A monitoring process based on information provided by employers may not be able to confirm deliberate underpayment or non-payment, or fraudulent behaviour by an employer (see Who must report).
Governing bodies should review current processes to ensure they detect situations where fraud may be more likely to occur and where additional checks may be appropriate.

Where employer contributions are not paid on time, and the governing body has reasonable cause to believe that the failure is likely to be of material significance to us (see also Decision to report), they should send a written report of the matter to us. This should be done within 14 days of the determination that the payment failure is materially significant.RS7

When an employer fails to pay employee contributions to the scheme, and the governing body believes it to likely be of material significance, this must be reported to us.RS8 Reports should be made to us within 14 days, and members should be notified within 30 days of the report to us.RS9

Glossary and legal references


Money 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.


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

Material significance

Determines whether we expect a breach of law to be reported to us, as determined by a number of factors, see Decision to report

RS1Articles 226A of The Pensions (Northern Ireland) Order 2005

RS2Section 249A(3) of the Pensions Act 2004
[Article 226A (3) of The Pensions (Northern Ireland) Order 2005]

RS3Articles 226B of The Pensions (Northern Ireland) Order 2005

RS4As defined in section 318(1) of the Pensions Act 2004
[Article 2(2) of The Pensions (Northern Ireland) Order 2005]

RS5As defined in Section 318(2) of the Pensions Act 2004
[Article 2(3) of The Pensions (Northern Ireland) Order 2005]

RS6Section 88(1) of Pensions Act 1995
[Article 86(1) of Pensions (Northern Ireland) Order 1995]

RS7Sections 70 and 70A of the Pensions Act 2004
[Articles 65 and 65A of the Pensions (Northern Ireland) Order 2005]

RS8Reporting to the regulator does not affect any responsibility to report to another person or organisation

RS9Sections 49(9) and 88(1) of The Pensions Act 1995
[Articles 49(9) and 86(1) of the Pensions (Northern Ireland) Order 1995]