Pensions Act 2004

Pensions Act 2004

2004 CHAPTER 35

Commentary on Sections

Part 1 – the Pensions Regulator

Financial support directions

Section 44: Meaning of “service company” and “insufficiently resourced”

173. This section defines the meaning of “service company” and “insufficiently resourced” for the purposes of section 43. Subsection (2) defines “service company” as a company whose turnover, as shown in the latest available company accounts, is solely or principally derived from amounts charged for the provision of the services of employees of the company to other companies in the same group.

174. Subsection (3) sets out that an employer is “insufficiently resourced” if the value of the resources of the employer is less than the amount which is a set percentage (to be prescribed in regulations) of the estimated debt which would become due from the employer under section 75 of the Pensions Act 1995 (deficiencies in the assets) if the scheme were to wind up, and there is a person who is connected with or an associate of the employer the value of whose resources is not less than the amount which is the difference between the value of the resources of the employer and the amount which is the set percentage of the estimated section 75 debt.

175. Subsection (4) provides that, for the purposes of subsection (3) what constitutes a person’s resources and their value are to be determined, calculated and verified in a prescribed manner. Subsection (5) provides that the “estimated section 75 debt” is the amount which the Regulator estimates as the amount of debt which would become due from the employer if section 75(2) of the Pensions Act 1995 applied and “the relevant time” were the time designated for the purposes of that subsection. Subsection (6) sets out that in estimating the section 75 debt in relation to the scheme in subsection (5) the amount of any debt actually due under that section is to be disregarded. Subsection (7) provides that “the relevant time” has the same meaning as in section 43.