Regulation and enforcement action
TPR has a range of options to them if action must be taken to protect members’ benefits:
- issue an improvement notice to individuals or companies, or a third party notice, requiring specific action to be taken within a certain time;
- take action, on behalf of a scheme, to recover unpaid contributions from the employer if the due date for payment has passed;
- issue a freezing order to temporarily halt all activity within the scheme so that it can investigate concerns and encourage negotiations where a scheme wind-up is pending and it believes that members’ interests may be at risk;
- prohibit individuals it does not consider fit and proper from acting as a pension scheme trustee;
- impose fines where breaches have occurred; and
- prosecute certain offences in the criminal courts, possibly leading to
Question - Use Your Note Taker To Jot Down Ideas / Calculations
XYZ Ltd’s defined benefit scheme is underfunded and XYZ Ltd is insufficiently resourced. If The Pensions Regulator believes XYZ Ltd is deliberately attempting to avoid their pension obligations, then it can issue:
a) a freezing order.
b) a contribution notice to the scheme.
c) a direction to require financial support to be put in place by XYZ Ltd.
d) an improvement notice requiring specific action to be taken within a certain time.
C)
Chapter reference 3A1C
A Financial support directive is put in place for an underfunded scheme where TPR concludes that the sponsoring employer is either a service company or is insufficiently resourced.