Insights and Analysis

New offences and powers for the Pensions Regulator: what employers and trustees should know – update

17 August 2021

The passage of the Pension Schemes Act 2021 (the Act) into the statute books has received press coverage far beyond the usual pension industry commentary. New criminal offences and civil penalties, plus increased powers for the Pensions Regulator (tPR), have raised concerns not just among sponsoring employers of defined benefit (DB) schemes but also from those with a wider relationship with these employers, such as group parent companies and the employer’s lenders.

In particular:

The Act creates new criminal offences, some punishable by up to seven years' imprisonment, plus a new civil financial penalty of up to £1m.
The circumstances in which tPR can issue a contribution notice (CN) requiring funding to be made to a DB scheme will be widened.
tPR will have increased powers to demand information, inspect premises or require an individual to attend an interview.
The notifiable events regime, requiring tPR to be told of specified events, will be extended.
The scheme specific funding regime will be strengthened, with a new requirement for trustees to prepare a “funding and investment strategy”.

Most provisions are not yet in force. tPR has recently consulted on a draft policy on how it will approach investigation and prosecution of the new criminal offences. Following consultation, final regulations have been issued in relation to the new employer resources test and tPR’s extended information gathering powers. We expect consultation on further draft regulations and guidance before tPR’s new powers have effect.

This note explains the various changes made by the Act and explores some of the implications for employers, trustees and others.

Click on the Download button to read the full briefing note.