Pensions Act 2004 Explanatory Notes

Pensions Act 2004

2004 CHAPTER 35

Commentary on Sections

Part 1 – the Pensions Regulator

Financial support directions

Section 43: Financial support directions

164. This section gives the Regulator power to issue a direction requiring that the recipient put in place appropriate financial support for an occupational pension scheme. This power arises where a sponsoring employer of a scheme is a service company, or is insufficiently resourced.

165. Subsection (1) provides that section 43 applies in relation to occupational pension schemes other than money purchase schemes, prescribed schemes or schemes of a prescribed description.

166. Subsection (2) provides that the Regulator may issue a financial support direction if it is of the opinion that the employer in relation to the pension scheme is a service company or is insufficiently resourced (as defined in section 44) at “the relevant time”. The relevant time is the time within a prescribed period which ends with the determination by the Regulator to exercise the power to issue the financial support direction in question (see subsection (9)).

167. Subsection (3) sets out that a financial support direction requires the person or persons to whom it is issued to secure that financial support for the scheme is put in place within the timescale specified by the Regulator in the direction, that this financial support remains in place until the scheme ceases to exist and that notice is given to the Regulator of prescribed events.

168. Subsection (4) provides that the Regulator may issue a financial support direction to one or more persons.

169. Subsections (5) and (6) set out the persons to whom a financial support direction can be issued. They also provide that the Regulator can only issue a financial support direction if it is of the opinion that it is reasonable to impose the requirements of the direction on that person

170. Subsection (7) sets out the matters which the Regulator should consider before deciding whether to issue a financial support direction on a particular person.

171. Subsection (8) provides that a financial support direction must identify all the persons to whom the direction is issued.

172. Subsection (10) provides that, for the purposes of subsection (3), a scheme is in existence until it is wound up. Subsection (11) provides that no duty to which a person is subject is to be regarded as contravened merely because of any information or opinion contained in a notice given by virtue of subsection (3)(c)(notice given to the Regulator of prescribed events). This is also subject to section 311 (protected items).