The Pensions Regulator

Regulator sets out reasonable periods for dispute resolution

Ref: PN07-17
25 October 2007

The Pensions Regulator has today published for consultation its expectations on the time within which disputes will be resolved.

Under legislation, trustees or managers of occupational schemes and trust-based stakeholder schemes must ensure there is a procedure in place for those with an interest in the scheme to apply for a decision on a matter in dispute. A decision must be made, and the applicant notified, within a reasonable period.

The regulator's code of practice 'Dispute Resolution – reasonable periods' sets out the regulator's expectations that:

• Disputes being considered by trustees or managers will be decided upon, and the applicant notified of the decision, within four months of them receiving the application.
• Applicants should be notified of the decision usually no later than 15 working days after the decision has been made.
• Trustees or managers may choose to adopt a procedure with a shorter decision and notification than four months if they wish.

The Pensions Regulator recognises that the circumstances of each dispute will be different. In some cases it may be possible to respond sooner, and where this is the case we would expect the decision not to be delayed.

In some circumstances it may not be possible to complete the procedure within the reasonable periods. Trustees and managers must be satisfied that the time taken is relevant to the situation and they have taken appropriate action to try and meet the timescales.

We welcome responses to the consultation which should be submitted by 19 December.

Editor's notes

1. Section 50 of the Pensions Act 1995 (as amended by the Act 2004) requires trustees or managers of occupational pension schemes or trust-based stakeholder schemes to have a procedure in place for any person with an interest in the scheme to make an application to them for a decision on a matter in dispute. Decisions on the dispute must be made, and the applicant notified, within a reasonable period.
   
   Section 90 of the Pensions Act 2004 requires the Pensions Regulator to issue codes of practice explaining what constitutes a reasonable period.
2. The code does not detail what form a dispute resolution procedure should take. This is for the trustees and managers to decide based on the requirements of their particular scheme.
3. 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. Although the code may not be the final version it does contain the Pensions Regulator's expectations which have been accepted by the Department for Work and Pensions. Therefore, trustees and employers can be confident they can start to act in accordance with the guidance contained in the code.
4. The Pensions Regulator is the regulator of work-based pensions in the UK, with wide-ranging and flexible powers under the Pensions Act 2004.

The powers of the Pensions Regulator include the ability to:

• collect more detailed scheme information;
• 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; and
• prohibit trustees who are judged not fit and proper to carry out their duties.

The Act also imposes a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator.