The Pensions Regulator

Consultation on Pensions Act 2004 code of practice: dispute resolution

Ref: PN05-05
1 April 2005

The Pensions Regulator today published the draft code of practice on dispute resolution procedures for pension schemes.

The code gives greater flexibility to pension scheme trustees or scheme managers when designing their scheme’s dispute resolution process. This extra flexibility will mean trustees can put in place a dispute resolution procedure that reflects the needs of their scheme.

Trustees and managers of pension schemes are invited to participate in the consultation on the code to ensure it is clear and workable. The consultation period ends on 13 May 2005 and the final code is due to be issued by the regulator in September 2005.

To participate in the consultation visit www.thepensionsregulator.gov.uk/.

Editor's notes

1. A pension dispute is between the trustees or managers of the scheme and a person with an interest in the scheme, about matters relating to the scheme.
   
2. A dispute resolution procedure is a formal process that allows an eligible person (applicant) to bring a complaint about the scheme to the trustees or scheme managers.
3. The trustees or scheme managers must make a decision on the dispute within a reasonable time period and notify the applicant of that decision within a reasonable time period.

4. The reasonable periods within which the trustees must make a decision on the dispute and notify the applicant of that decision are:

   • for a one stage procedure, four months; and
   • anything other than one stage procedures, ten months.

   The Pensions Regulator would not expect trustees or managers to delay where they are able to respond to the application sooner.

5. Codes of practice are not statements of the law. However they do have evidential value, meaning they will be taken into account by the Determinations Panel, a court or tribunal where relevant.
   
6. Initially, there will be 12 codes of practice. The first code, reporting breaches of the law, will be effective from April 2005.
   
7. On 6 April 2005, the Pensions Regulator will be established as the new regulator of work-based pensions in the UK, with wider and more flexible powers under the Pensions Act 2004. It will replace Opra which will cease to exist.
   
8. The new powers of the Pensions Regulator will include the ability to:
9. • issue improvement notices and third party notices, allowing the regulator to ensure problems are put right;
   • freeze a scheme that is at risk, while the regulator investigates;
   • prohibit trustees who are judged not fit and proper to carry out their duties;
   • collect more detailed scheme information; and
   • impose a statutory obligation so that 'whistleblowers' will report suspected breaches of the legislation to the regulator.