The Pensions Regulator

Code of practice 06
Reporting late payment of contributions to personal pensions

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Late payments which managers should not normally report

22. Managers should not normally report to the Pensions Regulator where one of the following circumstances applies, even if contributions remain unpaid 90 days after the due date:
    1. where there are infrequent late payments and the overdue contributions have now been paid, or arrangements are being put in place for the prompt payment of the overdue amount, for example, an administrative error which is corrected as soon as practicable and where reasonable steps are being taken to avoid a recurrence;
    2. where there are four or fewer employees with a direct payment arrangement with the same employer and same provider, unless the situations in 21 ii and/or 21 iii above apply;
    3. where there are short periods of lateness of contributions resulting from, for example, employees leaving, new employees joining, or changes in salary not being notified to managers;
    4. where a claim has been submitted to the Redundancy Payments Service of the Department of Trade and Industry for the outstanding contributions.

    The above list is illustrative only and is not exhaustive.

23. Managers may need to report, however, where more than one of the circumstances in 22 applies, as a combination of minor factors may mean that the late payments become materially significant to the Pensions Regulator.

Reasonable period for reporting to the Pensions Regulator

24. This section sets out what the Pensions Regulator considers to be a reasonable period for managers to report to us. Managers must make a report within a reasonable period after the due date. The more serious the risk of contributions remaining unpaid, the shorter the reasonable period becomes.
25. The Pensions Regulator considers that a reasonable period for managers to send reports (electronic or paper-based) of late payments will normally be within 10 working days of identifying that a late payment is material. For example, in the case of non-payment of contributions 90 days after the due date, managers should report at the latest within 10 working days after the end of the 90 day period, ie 90 days after the due date plus 10 working days.
26. Exceptionally, where there is a current or imminent danger to employees' and/or the employer's payments unless immediate preventative action is taken, managers should report urgent situations immediately by telephone as soon as they become aware of the occurrence. The managers should then confirm telephone reports in writing, for example by letter or email, as soon as reasonably practicable and in any event within 10 working days.

Reasonable period for notifying employees

27. If managers make a late payment report to the Pensions Regulator, they must also report to employees within a reasonable period after the due date. If the managers do not need to report to the Pensions Regulator, they are not required to report to employees. The Pensions Regulator expects managers to notify only those employees in respect of whom contributions are late. Managers may also notify other employees if they choose to.
28. Where managers make an urgent telephone report to the Pensions Regulator as in 26 above, they should report the material late payment to the employees as soon as reasonably practicable afterwards (unless they have already done so: see 30 below). The Pensions Regulator expects that a reasonable period for managers to make such a report will be within 30 days of the telephone call at the latest and, where practicable, reports should be made earlier.
29. In other circumstances requiring a report to employees, the Pensions Regulator expects managers to report as soon as reasonably practicable and in any event within 30 days. For example, as noted above, one of the circumstances in which managers should report to the Pensions Regulator is where contributions are outstanding 90 days after the due date (unless a late payment is deemed material before this point). In this situation, the Pensions Regulator considers that a reasonable period within which it expects managers to make such a report to employees (unless they have already done so) will be within 30 days following the end of the 90 day period, ie 120 days after the due date. This is the maximum period normally expected and, where practicable, reports should be made earlier.
30. Managers can of course report late payment to employees earlier than 90 days after the due date if they wish to, whether or not they consider it to be material. This is likely to be their favoured option if, for example, they consider that it may cause the employer to rectify the situation more quickly. If managers make an early report to employees there will be no need for them to make a further report to employees within 30 days of the 90 days, although they may wish to keep employees informed. They should still make a report to the Pensions Regulator after 90 days unless they have already done so.

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