The Pensions Regulator

Clearance

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What happens when an application is received?

140. Once the regulator's corporate risk management team has received the completed application form, a multidisciplinary case team will be allocated.
141. The case team will usually discuss the application with the applicants and the trustees to seek clarification or explore the facts of the case further. The regulator will expect the trustees to have full knowledge of the application and to have had time to consider the impact of the type A event, to have considered appropriate mitigation, and to have entered into any necessary negotiations, taking independent professional advice as required.
142. Once we have received the final, signed application form with sufficient information, we will formally consider whether to grant a clearance statement. In some circumstances, a clearance statement may not be granted.
143. A decision by the regulator to grant a clearance statement is subject to a formal statutory process.
144. If we are minded to grant a clearance statement, we will issue all directly affected parties with a 'warning notice'. This is a document that describes the circumstances set out in the application and that the regulator is relying on. It warns the directly affected parties that the regulator is considering granting a clearance statement based on these facts.
145. All directly affected parties will have an opportunity to provide representations on the warning notice and any representations received before the stated deadline are considered prior to issuing any determination to grant a clearance statement (which would be in the form of a 'determination notice' together with the clearance statement). The time allowed for representations will usually be discussed with the directly affected parties.
146. During clearance, the regulator has the power to ask for further information or to request that the application be amended.  The determination notice confirms the contents of the application.
147. It is inappropriate for the regulator to intervene on behalf of every scheme in relation to every type A event. Our preference is to be a referee in most transactions, rather than a player. We recognise, however, that this is an aspiration and that we will need to drive best practice, and it should be noted that the regulator has objectives over and above those of trustees, including the objective to reduce the risk of calls on the PPF.
148. If it appears that the trustees have not dealt with any conflicts of interest, have not had the opportunity to consider the application, or have not taken independent professional advice to allow them to do so, then the progress of the application will be delayed.
149. Where the insolvency of the employer is likely and the scheme may be assessed by the PPF, then the PPF may be included in any discussions with the applicants and trustees. The PPF is a separate body from the regulator.
     

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