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24.0 Introduction

This section outlines the regulatory framework and identifies the main authorities and regulatory bodies. It describes The Pension Regulator’s powers, reporting system and Codes of Practice.

Comment

The Pensions Regulator

The Pensions Regulator's duties include a wide educational remit, to work with trustees, employers and pension professionals to raise standards of scheme administration. Its aim continues to be to protect the benefits of members of work-based pension schemes: to promote good administration of work-based pension schemes and to reduce the risk of situations arising that might lead to claims for compensation from the Pension Protection Fund [see 16.10]. The Regulator also aims to identify and focus on those areas of greatest risk to members, targeting badly run and high-risk schemes  whilst  enabling well-administered schemes to continue without unnecessary regulatory burden. The Regulator also has a wider role in relation to:

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Data collection – trustees and scheme managers must notify (online) changes to ‘registrable’ information such as the scheme’s address, its trustees, types of benefit it provides, etc. Data is collected online via scheme returns, via 'whistleblower' reports of significant breaches of the law, and via trustees' and employers' reports of notifiable events. The Regulator has authority to demand and obtain documents (or other information) from trustees and employers, among others, relevant to its work as a Regulator.

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Powers – the Regulator’s powers fall into several categories: (a) investigating schemes (via gathering information) (b) putting things right (after problems have been identified) (c) investigating avoidance (to ensure employers and individuals do not ‘side-step’ their obligations), and (d) receiving reports and funding information (from schemes unable to comply with the funding framework).

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Codes of practice – approved by Parliament and issued by the Regulator, these give guidance for, and set out standards that the Regulator expects from those having duties under pensions legislation including those involved in scheme administration and the level of knowledge and understanding required of trustees.

See the Regulator’s website: http://www.thepensionsregulator.gov.uk

The Pensions Regulator's powers under the Pensions Act 2004 [see 2.6.2] were widened by the Pensions Act 2008 [see 2.10.4(b)(ii) (Note)]. Effective October 2012, the Government introduced (i) automatic enrolment into a qualifying workplace pension (ii) a compulsory minimum employer contribution (iii) a new compliance regime for employers and (iv) a simple, low-cost pension scheme (named NEST) so that all employers have access to a suitable pension scheme so as to meet their new duties. [See Section 25 for the detail]

The Pensions Regulator has an objective: to ‘maximise compliance’ with (a) employer duties, including auto-enrolment and (b) protections for workers, including ‘the prohibition on inducing opt-out from a qualifying pension scheme’.

Its powers let it ‘take proportionate, graduated compliance action’ where ‘education and enabling activities fail’. Action to overcome non-compliance will (i) start with a warning(s) followed by (ii) a statutory notice and then (iii) move to fixed and/or escalating penalties if non-compliance persists. Criminal prosecution will be an option for the most serious cases of wilful non-compliance with key employer duties.













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