The Occupational Pension Schemes (Charges and Governance) Regulations 2015

PART 4 U.K. COMPLIANCE

Amendment of the Register of Occupational and Personal Pension Schemes Regulations 2005 U.K.

24.—(1) Regulation 3(1) of the Register of Occupational and Personal Pension Schemes Regulations 2005 M1 is amended as follows.

(2) At the end of sub-paragraph (e) omit “and”.

(3) After sub-paragraph (g) M2 insert—

“(h) in the case of an occupational pension scheme which is a relevant scheme within the meaning of the Occupational Pension Schemes (Scheme Administration) Regulations 1996, whether the trustees or managers of that scheme have prepared the statement that they are required to prepare in accordance with regulation 23 of those Regulations; and

(i) in the case of an occupational pension scheme in respect of which the requirements of Part 2 of the Occupational Pension Schemes (Charges and Governance) Regulations 2015 apply to one or more of its members, whether the trustees or managers of that scheme have complied with those requirements in respect of each member to whom they apply.”.

Marginal Citations

M1 S.I. 2005/597.

M2 Sub-paragraph (g) was inserted by S.I. 2006/1733, regulation 4(1) and (2)(a).

Amendment of section 13 of the Pensions Act 2004 U.K.

25.  In section 13(7) of the Pensions Act 2004 M3 (improvement notices)—

(a) omit the “or” at the end of paragraph (d);

(b) at the end of paragraph (e) insert—

“, or

(f) paragraph 2 of Schedule 18 to the Pensions Act 2014 (c.19).”.

Marginal Citations

M3 2004 c.35. Subsection (7) was amended by the Public Service Pensions Act 2013 (c.25), section 17(1) and Schedule 4, paragraphs 1, 3(1) and (3)(a) and (b). The Pension Schemes Act 2015 (currently the Pension Schemes Bill before Parliament) will, when enacted, insert an additional paragraph into subsection 7 which, depending upon when that Bill receives Royal Assent, may either precede or follow the paragraph (f) inserted by this regulation 25(b).

Compliance notices U.K.

26.—(1) The Regulator may issue a compliance notice to [F1 a person] in any of the circumstances of non-compliance in paragraph (2).

(2) The circumstances mentioned in paragraph (1) are—

(a) receipt of an indication pursuant to regulation 3(1)(i) M4 of the Register of Occupational and Personal Pension Schemes Regulations 2005 that the [F2 person has] not complied with Part 2 of these Regulations; or

(b) if the Regulator is of the opinion that the [F3 person is not complying with, or has not complied with,] Part 2 of these Regulations.

(3) A compliance notice is a notice directing the [F4 person] to whom it is issued to take, or refrain from taking, the steps specified in the notice.

(4) The steps mentioned in paragraph (3) may be any steps that the Regulator reasonably requires with a view to ensuring that any non-compliance with Part 2 of these Regulations is remedied and, where appropriate, not repeated.

(5) A direction in a compliance notice may be expressed to be conditional on compliance by a third party with a specified direction contained in a third party compliance notice under regulation 27.

(6) A compliance notice may, in particular—

(a) state the period within which any step must be taken or must cease to be taken;

(b) require the [F5 person] to provide within a specified period specified information relating to the non-compliance;

(c) require the [F6 person] to inform the Regulator, within a specified period, how the person has complied with or is complying with the notice;

(d) state that if the Regulator is of the opinion that the [F7 person has] failed to comply with the requirements of the notice, the Regulator may issue a penalty notice under sub-paragraph (b)(i) of paragraph (1) of regulation 28;

(e) give the [F8 person] a choice between different ways of remedying, or preventing the recurrence of, the non-compliance.

(7) A compliance notice must—

(a) state which of the circumstances of non-compliance in paragraph (2) applies; and

(b) if the circumstance in paragraph (2)(b) applies, state—

(i) which provision of Part 2 of these Regulations the Regulator believes was not, or is not being, complied with; and

(ii) the evidence on which that belief is based.

Textual Amendments

F1 Words in reg. 26(1) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(2)

F2 Words in reg. 26(2)(a) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(3)(a)

F3 Words in reg. 26(2)(b) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(3)(b)

F4 Word in reg. 26(3) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(4)

F5 Word in reg. 26(6)(b) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(4)

F6 Word in reg. 26(6)(c) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(4)

F7 Words in reg. 26(6)(d) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(5)

F8 Word in reg. 26(6)(e) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 7(4)

Marginal Citations

M4 Inserted by regulation 24(3) of these Regulations.

Third party compliance notices U.K.

27.—(1) Where in any of the circumstances of non-compliance in paragraph (2)—

(a) the Regulator is of the opinion that the non-compliance is or was, wholly or partly, a result of a failure of [F9 another person] (“the third party”), and

(b) that failure is not in itself a contravention of F10 ... Part 2 of these Regulations, the Regulator may issue to the third party a third party compliance notice.

(2) The circumstances mentioned in paragraph (1) are—

(a) receipt of an indication pursuant to regulation 3(1)(i) of the Register of Occupational and Personal Pension Schemes Regulations 2005 that the [F11 person has] not complied with Part 2 of these Regulations;

(b) receipt of an indication that the [F12 person is] unable to confirm whether they are complying or will be able to comply with that Part; or

(c) if the Regulator is of the opinion that the [F13 person is not complying with, or has not complied with,] that Part.

(3) A third party compliance notice is a notice directing the third party to take, or refrain from taking, the steps specified in the notice.

(4) The steps mentioned in paragraph (3) may be any steps that the Regulator reasonably requires with a view to remedying and, where appropriate, preventing a recurrence of the failure mentioned in paragraph (1).

(5) A third party compliance notice may, in particular—

(a) state the period within which any step must be taken or must cease to be taken;

(b) require the third party to provide within a specified period specified information relating to the failure;

(c) require the third party to inform the Regulator, within a specified period, how the third party has complied with or is complying with the notice;

(d) state that, if the Regulator is of the opinion that the third party has failed to comply with the requirements of the notice, the Regulator may issue a penalty notice under sub-paragraph (a) of paragraph (1) of regulation 28;

(e) give the third party a choice between different ways of remedying or preventing the recurrence of the failure.

(6) A third party compliance notice must state—

(a) which of the circumstances of non-compliance in paragraph (2) applies; and

(b) the matters which the Regulator believes constitute the failure by the third party; and

(c) if the circumstance in paragraph (2)(c) applies, in addition to the matters mentioned in sub-paragraphs (a) and (b)—

(i) which provision of Part 2 of these Regulations the Regulator believes was not, or is not being, complied with; and

(ii) the evidence on which the Regulator's belief is based.

Textual Amendments

F9 Words in reg. 27(1)(a) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 8(2)(a)

F10 Word in reg. 27(1)(b) omitted (6.4.2016) by virtue of The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 8(2)(b)

F11 Words in reg. 27(2)(a) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 8(3)(a)

F12 Words in reg. 27(2)(b) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 8(3)(b)

F13 Words in reg. 27(2)(c) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 8(3)(c)

Penalty notices U.K.

28.—(1) Subject to paragraph (2), the Regulator may issue a penalty notice to—

(a) a third party where it is of the opinion that the third party has failed to comply with a third party compliance notice under regulation 27; or

(b) [F14 a person where it is of the opinion that the person has] failed to comply with—

(i) a compliance notice under regulation 26;

(ii) a provision in Part 2 of these Regulations; or

(iii) a provision in Part V of the Administration Regulations.

(2) Where—

(a) the Regulator is in receipt of an indication pursuant to regulation 3(1)(h) M5 of the Register of Occupational and Personal Pension Schemes Regulations 2005 that the trustees or managers have failed to prepare the statement that they are required to prepare by regulation 23 M6 of the Administration Regulations; or

(b) the Regulator is of the opinion that the trustees or managers have failed to prepare the statement that they are required to prepare by regulation 23 of the Administration Regulations, the Regulator must issue a penalty notice to the trustees or managers in relation to a first failure in connection with a scheme year.

(3) A penalty notice is a notice requiring the person to whom it is issued to pay a penalty within the period specified in the notice.

(4) The amount of a penalty is to be determined by the Regulator but—

(a) in relation to a penalty notice issued under paragraph (1) must not exceed—

(i) £5,000 if the person is an individual, or

(ii) £50,000 if the person is a body corporate or a Scottish partnership or any other person;

(b) in relation to a penalty notice issued under paragraph (2), must be at least £500 and must not exceed £2,000.

(5) A penalty notice must—

(a) where it is issued to trustees or managers, be issued to all the trustees or managers of the relevant scheme and specify their joint and several liability for the penalty;

F15 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F16 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(d) state the amount of the penalty;

(e) state the date, which must be at least 4 weeks after the date on which the notice is issued, by which the penalty must be paid;

(f) state the period (if any) to which the penalty relates;

(g) if the notice is issued under paragraph (1)(a) or (b)(i), specify the failure to which the notice relates;

(h) if the notice is issued under paragraph (1)(b)(ii) or (iii), specify the provision or provisions that have not been complied with;

(i) notify the person to whom the notice is issued of the review process under regulation 31 and the right of referral to a tribunal under regulation 32.

F17 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F14 Words in reg. 28(1)(b) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 9(2)

F15 Reg. 28(5)(b) omitted (6.4.2016) by virtue of The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 9(3)

F16 Reg. 28(5)(c) omitted (6.4.2016) by virtue of The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 9(3)

F17 Reg. 28(6) omitted (6.4.2016) by virtue of The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 9(3)

Marginal Citations

M5 Inserted by regulation 24(3) of these Regulations.

M6 Inserted by regulation 17 of these Regulations.

Penalty notices: recovery U.K.

29.—(1) Any penalty required by a penalty notice is recoverable by the Regulator.

(2) In England and Wales, any such penalty is, if the county court so orders, recoverable under section 85 of the County Courts Act 1984 M7 or otherwise as if it were payable under an order of that court.

(3) In Scotland, any such penalty is enforceable as if it were an extract registered decree arbitral bearing a warrant for execution signed by the sheriff court of any sheriffdom in Scotland.

(4) The Regulator must pay into the Consolidated Fund any penalty recovered under this regulation.

Marginal Citations

M7 1984 c. 28.

[F18 Penalty notices: recovery from bodies corporate and Scottish partnerships U.K.

30.— (1) Where—

(a) a penalty under regulation 28 is recoverable from a body corporate or Scottish partnership by reason of any act or omission of the body or partnership; and

(b) the act or omission was done with the consent or connivance of, or is attributable to any neglect on the part of any persons mentioned in paragraph (2),

the Regulator may issue the notice to each of those persons who consented to or connived in the act or omission or to whose neglect the act or omission was attributable.

(2) The persons referred to in paragraph (1) are—

(a) in relation to a body corporate—

(i) any director, manager, secretary, or other similar officer of the body, or a person purporting to act in any such capacity; and

(ii) where the affairs of a body corporate are managed by its members, any member who has management functions; and

(b) in relation to a Scottish partnership, the partners of that partnership.

(3) Where the Regulator requires any person mentioned in paragraph (2) to pay a penalty, it—

(a) may not also require the body corporate, or Scottish partnership, in question to pay a penalty in respect of the same act or omission; and

(b) must issue the penalty notice to the person who is required to pay, but may also notify the relevant body corporate or Scottish partnership.]

Textual Amendments

F18 Reg. 30 substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 10

Review of penalty notices U.K.

31.—(1) The Regulator may review a notice to which this paragraph applies—

(a) on the written application of the person to whom the notice was issued, or

(b) if the Regulator otherwise considers it appropriate.

(2) Paragraph (1) applies to—

(a) a compliance notice issued under regulation 26;

(b) a third party compliance notice issued under regulation 27; and

(c) a penalty notice issued under regulation 28.

(3) The period within which—

(a) an application to review a notice may be made under paragraph (1)(a) is 28 days, starting on the day on which the notice is issued to a person; and

(b) a notice may be reviewed under paragraph (1)(b) is 18 months, starting on the day on which the notice is issued to a person.

(4) On a review of a notice, the effect of the notice is suspended for the period beginning on the day the Regulator determines to carry out the review and ending on the day on which the review is completed.

(5) In carrying out a review, the Regulator must consider any representations made by the person to whom the notice was issued.

(6) The Regulator's powers on a review are to—

(a) confirm, vary or revoke the notice;

(b) substitute a different notice.

References to First-Tier Tribunal or Upper Tribunal U.K.

32.—(1) A person to whom a penalty notice is issued under regulation 28 may, if one of the conditions in paragraph (2) is satisfied, make a reference to the Tribunal in respect of—

(a) the issue of the notice;

(b) the amount of the penalty under the notice.

(2) The conditions are—

(a) that the Regulator has completed a review of the notice under regulation 31; or

(b) that the person to whom the notice was issued has made an application for the review of the notice under paragraph (1)(a) of regulation 31 and the Regulator has determined not to carry out such a review.

(3) On a reference to the Tribunal in respect of a notice, the effect of the notice is suspended for the period beginning on the day on which the Tribunal receives notice of the reference and ending—

(a) on the day on which the reference is withdrawn; or

(b) if the reference is made out of time, on the day on which the Tribunal determines not to allow the reference to proceed; or

(c) when the reference is completed.

[F19 (4) For the purposes of paragraph (3)(c), a reference is completed when—

(a) the reference has been determined; and

(b) the Tribunal has remitted the matter to the Regulator.]

(5) In this regulation—

(a) “the Tribunal” means—

(i) the Upper Tribunal, in any case where it is determined by or under Tribunal Procedure Rules that the Upper Tribunal is to hear the reference;

(ii) the First Tier Tribunal in any other case, and

(b) “Tribunal Procedure Rules” means—

(i) the Tribunal Procedure (First-Tier Tribunal) (General Regulatory Chamber) Rules 2009 M8 in relation to the First-Tier Tribunal; and

(ii) the Tribunal Procedure (Upper Tribunal) Rules 2008 M9 in relation to the Upper Tribunal.

Textual Amendments

F19 Reg. 32(4) substituted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 11

Marginal Citations

M8 S.I. 2009/1976.

M9 S.I. 2008/2698.

[F20 Service of notices U.K.

33.   Sections 303 to 305 of the Pensions Act 2004 (service of documents and electronic working) are treated as applying to notices issued under Part 4 of these Regulations.]

Textual Amendments

F20 Reg. 33 inserted (6.4.2016) by The Occupational Pension Schemes (Charges and Governance) (Amendment) Regulations 2016 (S.I. 2016/304), regs. 1, 12