In our October update we summarised the Government’s proposed amendments to the then Pensions Bill (now the Pensions Act 2008) to require the Pensions Regulator (TPR) to produce a code of practice outlining when it expects to use the new “material detriment” test in contemplation of issuing a contribution notice.
TPR has now published the draft code for consultation. The draft code reflects the amendments proposed in October and indicates that the new power will apply in relation to the following situations:
- The transfer of the scheme out of the jurisdictions of the UK.
- The transfer out of the jurisdictions of the UK of the sponsoring employer if by doing so there is a material reduction in the level of employer support or legal and regulatory protection for scheme members.
- The severing of employer support for the scheme so that employer support is removed, substantially reduced or becomes nominal.
- The transfer of liabilities of the scheme to another scheme or arrangement which does not have sufficient employer support or is not sufficiently well funded.
- A business model for, or the operation of, the scheme in such a way that is designed to create a financial benefit for the employer or some other person from the scheme, but where inadequate account has been taken of the interests of the members of the scheme, including where risks to members are increased.
The consultation period ends on 6 February 2009.
View the consultation paper (pdf)(96KB)