The Pensions Regulator

Reporting late payments codes of practice published

Ref: PN06-07
7 March 2006

Two draft codes of practice, Reporting late payments of contributions to occupational money purchase schemes and Reporting late payments of contributions to personal pensions have been laid before Parliament.

The legislation on late payments is expected to be effective from April 2006. The codes of practice:

• give guidelines about reporting to the Regulator and to members the late payment of contributions; and
• clarify the obligations of trustees and pension scheme managers to report to the Regulator the late payment of contributions into the pension scheme. They only need to do this where it is likely to be of material significance. Examples of when late payments should and should not be reported are provided in the codes.

The Reporting late payments of contributions to personal pensions code also covers the new legislative requirement for employers to supply scheme managers with the information they need to monitor the payment of contributions and for managers to report to the Regulator when they do not obtain this information.

Also available on the regulator's website, together with the codes, is a consultation report for each code summarising the Regulator's responses to the helpful feedback received from stakeholders during the consultation period.

The Reporting late payments of contributions to occupational money purchase schemes code applies to the trustees of money purchase schemes. The Reporting late payments of contributions to personal pensions code applies to managers of personal pension plans and stakeholder pension plans where there are direct payment arrangements (i.e. the employer deducts contributions from pay and remits them to the pension plan).

If a decision to report is made, the codes state that a report should be made as soon as reasonably practicable and normally within ten working days of identifying that a late payment is material.

To view the two codes of practice and the consultation feedback document visit: http://www.thepensionsregulator.gov.uk/

Editor's notes

1. The Reporting late payments of contributions to personal pensions code covers requirements under section 111A of the Pensions Schemes Act 1993 (as will be amended) and the Personal Pension Schemes (Payments by Employers) Regulations 2000 SI No. 2692. There are similar requirements under the corresponding NI legislation.
2. The Reporting late payments of contributions to money purchase occupational schemes code covers requirements under both sections 49 and 88 of the Pensions Act 1995 (as will be amended) and the Occupational Pensions Schemes (Scheme Administration) Regulations 1996 SI No. 1715 (as will be amended). There are similar requirements under the corresponding NI legislation.
3. The two late payment codes aim to help trustees and managers meet new requirements to report late payment of contributions, which are likely to be of material significance to the regulator. There are no changes to the legal time limits for the payment of contributions to occupational and personal pension schemes.
4. In April 2005 the regulator issued Briefings 1 & 2 containing our expectations for the reporting of late payments in the period until the codes of practice come into force. These Briefings are available on our website.
5. Codes of practice are not statements of the law and there is no penalty for failing to comply with them. However, the codes do have legal status and they must be taken into consideration by a court or tribunal if they are relevant to what is being decided.
6. The Pensions Regulator has been established as the new regulator of work-based pensions in the UK, with wider and more flexible powers under the Pensions Act 2004. It has replaced Opra which has ceased to exist.
7. The new powers of the Pensions Regulator include the ability to:
   • collect more detailed scheme information;
   • impose a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator;
   • issue improvement notices and third party notices, enabling 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; and recover unpaid contributions.