The Pensions Regulator

Reporting breachesComplying with the duty to report breaches of the law

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Code paragraphs 35 to 45

(the traffic light framework)

We put forward a traffic light framework to help reporters decide whether a breach is likely to be of material significance. The examples of red, green and amber breach situations in this guidance provide benchmarks against which reporters can judge breaches they come across.

• Red breach situations are always of material significance to the Pensions Regulator and should be reported.
• Green breach situations are not of material significance and do not have to be reported (but should be recorded).
• Amber breach situations are less clear cut; a reporter must take into account the context of the breach in order to decide whether it is of material significance and should be reported.

The examples in this guidance are not an exhaustive list. They are designed to illustrate situations with which any actual breach can be compared and thereby aid the reporter in reaching the appropriate decision in conformity with the legislation and the code. They should not be taken to be a substitute for the exercise of judgement by the reporter based on the principles set out in the code itself.

Red breach situations

A breach is in the red category because one or more of the following applies:

• it was caused by dishonesty, poor scheme governance, poor advice or by a deliberate contravention of the law;
• its effect is significant;
• inadequate steps are being taken to put matters right; or
• it has wider implications.

Green breach situations

A breach is in the green category because all of the following apply:

• it was not caused by dishonesty, poor scheme governance, poor advice or by a deliberate contravention of the law;
• its effect is not significant;
• proper steps are being taken to put matters right; and
• it does not have wider implications.

Amber breach situations

A breach in this category does not fall obviously into the red or green classification. The decision whether or not to report will require a balanced judgement based on the breach's cause, its effect, the reaction of trustees and others to it and any wider implications it may have. In this context, other previous reported or unreported breaches will be relevant in deciding whether a contributory cause of the breach is lack of adequate oversight or controls on the part of the trustees.

view amber breach situations

View code paragraphs 35 - 45.

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