The Pensions Regulator (TPR) has published the response to its October 2012 consultation on revised codes of practice and guidance on reporting late payment of contributions to DC schemes (see that month's Pensions update). In view of comments received, it has amended and clarified the drafts, which are expected to come into force in autumn 2013 if approved by Parliament. Key changes and clarifications are as follows:
- TPR confirms that the codes and guidance apply to all DC schemes, regardless of the number of members, because the automatic enrolment legislation applies to all employers. This is a change from the existing codes, which do not apply to schemes with fewer than five active members.
- It is confirmed that trustees and managers need not monitor every single contribution received but should adopt a risk-based and proportionate approach for their scheme.
- They should have in place a process to flag errors in payment information which will prompt them to undertake more detailed examination and intervention and request the employer to provide any additional information they need. The employer should provide this within seven working days. If it fails to do so, the trustees should report that failure to TPR within 14 days of the date of the request – this is quite a short timescale, given that the first period is measured in working days. However, TPR encourages communication between trustees and employers to try to resolve the situation.
- The deadline for reporting material payment failure to TPR will not now be changed to 120 days from the current 90.
- Similarly, the proposal that reports of material payment failure should be made to TPR and to members simultaneously has been abandoned. Instead the previous requirement has been restored: reports must be made to TPR within 10 working days and to members as soon as practicable thereafter and in any event within 30 days.
- Nil returns of material payment failures will not now be required.
Further information
Consultation response
Revised draft Code 5 and guidance: occupational
pension schemes
Revised draft Code 6 and guidance: personal
pension schemes)
Pensions update, October 2012
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