The UK government has issued a response to its consultation on extending the powers of The Pensions Regulator (TPR).
The consultation was conducted between 18 March and 29 April seeking views on the proposed drafting of two sets of draft regulations: The Pensions Regulator (Contribution Notices) (Amendment) Regulations 2021 – now referred to as The Pensions Regulator (Employer Resources Test) Regulations 2021 – and The Pensions Regulator (Information Gathering Powers and Miscellaneous Amendments) Regulations 2021 – now referred to as The Pensions Regulator (Information Gathering Powers and Modification) Regulations 2021.
Guy Opperman, minister for pensions and financial inclusion, said: “The UK already has a robust system in place to protect defined benefit pensions, and the measures in the Pension Schemes Act 2021 (the Act) build on and strengthen these safeguards, aligning the overall policy with The Pensions Regulator’s approach of being clearer, quicker and tougher.”
He said that provisions in the Act give TPR stronger powers to deal with the small number of circumstances where employers decide to evade their obligations.
Section 103 of the Act amends section 38 of the Pensions Act 2004, and inserts a new section 38E which introduces the ‘employer resources test’. This will provide an alternative test, which will work alongside the existing regime, to assess whether an act or failure to act has occurred for determining whether a section 38 Contribution Notice can be issued, the response stated.
The new section 38E includes regulation making powers to prescribe how the resources of a sponsoring employer are to be determined. Specifically:
- what constitutes the resources of an employer; and
- how the value of resources of the employer is to be determined, calculated and verified for the purposes of the ‘employer resources test’.
The draft regulation – The Pensions Regulator (Information Gathering Powers and Miscellaneous Amendments) Regulations 2021 – also prescribes:
- information that interview notices should contain;
- modifies how inspection powers may be utilised in multi-employer schemes; and
- sets out the fixed or escalating penalty rates for non-compliance with information gathering requests.
These regulations are expected to come into force in October 2021.
The UK government received technical responses to the consultation with contributions from several stakeholders which have helped improve the drafting of the regulations.
“As with all policies, we will keep these under review and take account of relevant changes in business practices,” it stated.
“Once complete, this wider package of regulations accompanied by The Pensions Regulator’s associated codes of practice represents the final step in this journey in meeting our manifesto commitments in providing The Pensions Regulator with new and improved powers so that it can intervene more effectively to protect members’ hard earned retirement savings,” Opperman said.