Govt launches consultation on TPR notifiable event regulations

The government has launched a consultation on draft regulations regarding The Pensions Regulator's (TPR) increased powers that extend the type of events that trustees and sponsoring employers are required to notify the regulator about.

The consultation, Strengthening TPR's Powers: Notifiable Events (Amendments) Regulations 2021, would introduce the duty to give notices and statements to TPR for two new notifiable events and an existing event under the new section 69A.

Section 69A of the Pension Schemes Act 2021 introduced the duty for relevant persons to give notices and statements to TPR that set out the implications for the scheme in relation to certain corporate events relating to the employer, and how any risks to the scheme will be mitigated.

The two new notifiable events, however, have been slightly modified since the consultation response to apply to all employers when a decision in principle has been taken.

In particular, the first new notifiable event, the intended sale by the employer of a material proportion of its business or assets, was initially expected to apply to employers responsible for 20 per cent or more of the scheme’s funding.

However, the government acknowledged that multi-employer schemes can be "complex", stating that it has been persuaded that "there are circumstances where that policy intention could not be met – and that it would be challenging for some schemes and employers to establish whether a particular threshold of liabilities had been met regarding one of the scheme employers".

In light of this, the 20 per cent threshold has been removed in the draft regulations, meaning that employers will only have to concern themselves with establishing whether the transaction affects a material part of their business or assets.

The second new notifiable event is the intended granting or extending of a relevant security by the employer over its assets such that, should the employer become insolvent, the secured creditor would be ranked above the scheme in the order of priority for debt recovery.

The third, existing, event whereby a notice and statement must be given to TPR is when, where the employer is a company, there is an intended relinquishing or relinquishment of control of the employer company by a controlling company.

Wrongful trading, meanwhile, has been removed as a notifiable event, although the Department for Work and Pensions (DWP) clarified that this is not to diminish the seriousness of wrongful trading, but to acknowledge that the requirement is ineffective, with TPR confirming it has never received a notification under this provision.

“Furthermore, the introduction of the wider suite of powers for TPR introduced in the Pension Schemes Act 2021, provides far better protection for scheme members in terms of checks and balances against bad conduct,” it stated.

The targeted consultation is seeking views on the draft regulations and any unintended consequences that they could have on specific groups, and will run until 27 October.

The consultation stated: “These draft regulations, alongside the changes to primary legislation inserted by the Pension Schemes Act 2021 deliver on our manifesto commitment to equip TPR with powers to be sighted on specific events enabling it to get involved where sponsoring employers intend to make changes which could significantly impact the pension scheme."

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