The DWP has now published the eagerly awaited consultation on the changes to the occupational pensions notifiable events regime under the Pension Schemes Act 2021. The new obligations are broadly as expected:

A

       To notify the Pensions Regulator of an intended sale of a material proportion (more than 25%) of a sponsoring employer’s assets or business, including any disposals agreed in the prior 12 months.

B       

To notify the Pensions Regulator of an intention to grant or extend relevant security (more than 25% of consolidated revenues or gross assets) over a sponsoring employer’s assets in priority to the pension scheme’s claim.

C       

To bring forward the existing requirement to notify the Pensions Regulator of a decision by a controlling company to relinquish control of a sponsoring employer to the time when a decision in principle is made, and to add a requirement to notify if an offer to acquire the employer company is made.

D       notice and statement to be given to the Pensions Regulator and the pension scheme trustees in three circumstances with a statement about their implications for and mitigation of any adverse effects on the scheme:

A new type of

- for transaction A above, at the stage where main terms have been proposed

- for transaction B above, at the stage where main terms have been proposed

- for transaction C above, at the stage where main terms have been proposed or where the controlling company did not make the decision, the relinquishing of control by it

E       

To update the Pensions Regulator and pension scheme trustees of material changes to the transaction, whether of its terms or the proposed mitigation for the pension scheme.

As expected, the previous obligation to notify wrongful trading is being removed, on the basis of it not being very useful in practice for fairly obvious reasons. The Pensions Regulator reports that it has never been used.

These new obligations may come into force in April 2022 and, at least as currently drafted, leave a large degree of uncertainty about the exact scope and timing of obligations on employers in a number of areas. There is a difficult line to draw between ensuring the Regulator and pension scheme trustees receive relevant information when most useful to them, and giving parties to transactions sufficient certainty of their legal obligations. Burges Salmon is actively participating in responses to the consultation from a number of industry groups in order to assist the DWP in finalising these regulations, and will be submitting its own response. 

Please do let us know if you would like to discuss these new obligations with us.