New Pensions Regulator Notification Requirements For DB Scheme Employers

• Published date: 23 September 2021
• Subject Matter: Employment and HR, Retirement, Superannuation & Pensions, Employee Benefits & Compensation
• Law Firm: Mayer Brown
• Author: Mr Andrew Block, Beverly Cox, Beth Brown and Katherine Carter

The government is consulting on regulations that (a) make changes to the list of employer notifiable events and (b) prescribe the events affecting a DB scheme employer in respect of which a notice and accompanying statement (often referred to as a "declaration of intent") must be given to the Pensions Regulator ("TPR") and the scheme trustees. The regulations are intended to come into force on 6 April 2022.

In addition, regulations have been laid before Parliament that will bring the majority of TPR's new powers and sanctions under the Pension Schemes Act 2021 (the "Act") into force on 1 October 2021.

Changes to the list of employer notifiable events

The regulations:

• Remove wrongful trading from the list of employer notifiable events because this requirement is ineffective as a director guilty of wrongful trading is unlikely to admit this to TPR. This amendment does not intend to diminish the serious ness of wrongful trading but rather reflect reality.
• Amend the existing employer change of control notifiable event to make it clear that the notification should take place when a decision is principle is made. A decision in principle is the point at which the decision to go ahead with an event is made, prior to any negotiations or agreements being entered into with another party.
• Add two new employer notifiable events
  • A decision in principle by the employer to sell a material proportion of its business or assets.
  • A decision in principle by the employer to grant or extend a security over its assets where that grant/extension would result in the secured creditor being ranked above the scheme in the order of priority for debt recovery.

New "declaration of intent" requirements

The Act will introduce a requirement for the "appropriate person" to give notice to TPR of certain prescribed events in relation to the employer of a DB scheme and to provide an accompanying statement about the impact of the event on the scheme (often referred to as the "declaration of intent"). A copy of the notice and the accompanying statement must also be given to the trustees of the scheme at the same time that they are given to TPR. The appropriate person is the employer or any person connected or associated with the employer.

The regulations prescribe the following as events in respect of which a notice and accompanying statement must be given to TPR and the trustees:

• The intended sale by the employer of a material proportion of its business or assets, in respect of which the...