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National Institute of Agricultural Botany pension scheme - Regulatory intervention report

Issued in relation to the National Institute of Agricultural Botany pension scheme.

Published: 4 August 2020

Case summary

We considered using our anti-avoidance powers in this case where the pension scheme was at risk as a result of a historic organisational restructure. After months of settlement discussions and the issue of a Warning Notice, the pension scheme is now in a much stronger position and has two statutory employers. This result was achieved without us having to use our formal powers and the associated costs this would involve for all parties.


The National Institute of Agricultural Botany is a crop science and research organisation, with expertise in plant genetics, agronomy, farming systems and data science. It has research links with industry, government and academia.

NIAB and NIAB Trust were originally part of one entity, also called the National Institute of Agricultural Botany, which was a non-departmental public body closely associated with the then Ministry of Agriculture, Fisheries and Food. The Institute was privatised in 1996, and in 1998 was split into two, with its liabilities and operations transferred to NIAB. NIAB was the sole statutory employer of the National Institute of Agricultural Botany (1996) Pension Scheme.

NIAB Trust, a registered charity, was created with responsibility for the Institute’s remaining land, buildings and valuable assets.

NIAB Trust’s specific objectives as a charity included providing support (including land, facilities and financial support) to NIAB in the pursuit of its aims. This separation of valuable land assets from liabilities (including the pension scheme) left the scheme in a vulnerable position. Its statutory employer, NIAB, had net assets of only £3.7 million as at 31 March 2017. According to NIAB Trust’s accounts, its net assets at the same date were £50.5 million. This included assets inherited from the Institute, which before 1998 would have been available to meet its liabilities, include the pension scheme.

NIAB Trust also benefited from NIAB as it carries out its activities using NIAB employees and receives intellectual property from the activities of NIAB employees.

Regulatory action

The scheme’s trustees attempted to secure formal support from NIAB Trust but were unsuccessful. This resulted in a failure to agree the 2015 funding valuation as the trustees concluded that the covenant of NIAB alone could not support the scheme.

In June 2018, we began investigating whether it would be appropriate to seek a financial support direction (FSD) under section 43 of the Pensions Act 2004 against NIAB Trust. An FSD requires financial support to be put in place for a scheme over and above that provided by the scheme’s statutory employer(s). The target of the FSD initially has the flexibility to propose how they will support the scheme and we will then consider whether this is reasonable in all the circumstances. If we conclude that the financial support proposed is insufficient we can proceed to issue a notice for a fixed amount.

We informed NIAB Trust that we were considering an FSD and settlement negotiations with NIAB Trust were opened with the aim of securing support for the scheme without the need to formally use our powers.

In September 2018, we issued a Warning Notice seeking an FSD against NIAB Trust to protect the scheme’s position while settlement negotiations continued. The deadline for NIAB Trust to respond to the Warning Notice was extended to facilitate these settlement discussions.

In December 2019, following lengthy negotiations between NIAB Trust, the trustees and The Pensions Regulator, a settlement was agreed which saw NIAB Trust becoming a statutory employer to the scheme. This means that it now shares responsibility for the full scheme deficit with NIAB.

As NIAB Trust is a charity, it must balance its charitable objectives with its other responsibilities. The flexibility of the settlement allows it to provide legally binding, long-term support to the scheme and its members.

As part of the negotiations, the trustees have also agreed both the 2015 and 2018 valuations which see both NIAB and NIAB Trust taking joint responsibility for the deficit repair contributions due as part of the recovery plan.

Thanks to the hard work of all the parties involved, the scheme now has two statutory employers and has greater access to the assets of NIAB Trust for the benefit of its members.

Our approach

The case demonstrates that we will work with employers, trustees and the targets of our FSD powers to achieve the best possible outcome for members.

Meaningful settlement discussions can take place in parallel with avoidance investigations, and good outcomes achieved without the need for us to formally use our powers and the associated costs that a Determinations Panel process and/or an Upper Tribunal hearing would involve.

We will consider all credible settlement proposals that meet our statutory objectives, which include the protection of members’ benefits under occupational pension schemes and the reduction of the risk of calls on the Pension Protection Fund.


  • 1998 – National Institute of Agricultural Botany splits into two and charitable trust is formed.
  • 2015 – Trustees fail to agree valuation as NIAB covenant cannot support scheme.
  • June 2018 – We consider use of FSD. Settlement discussions begin.
  • September 2018 – TPR issues Warning Notice.
  • December 2019 – Settlement agreed with trustee. NIAB Trust agrees to become scheme statutory employer.
  • January 2020 – NIAB Trust becomes scheme statutory employer.