Part 3 - Update On Antiavoidance Legislation And TPR's Role

WB
Wedlake Bell

Contributor

We are a contemporary London law firm, rooted in tradition with a lasting legacy of client service. Founded in 1780, we recognise the long-standing relationships we have with our clients and how they have helped shape our past and provide a platform for our future. With 76 partners supported by over 300 lawyers and support staff, we operate on a four practice group model: private client, business services, real estate and dispute resolution. Our driving force is to empower our clients by providing quality legal advice, insight and intelligence that enables them to achieve their goals whether personal or business. We are large enough to advise on the most complex matters, but small enough to ensure that our people and our work remain exceptional and dynamic. Building relationships is at the heart of everything we do.
The new criminal offences and additional grounds for contribution notices ("CNs") under Pension Schemes Act 2021 are expected
UK Litigation, Mediation & Arbitration
To print this article, all you need is to be registered or login on Mondaq.com.

Recap

The new criminal offences and additional grounds for contribution notices ("CNs") under Pension Schemes Act 2021 are expected to take effect in about two months' time on 1 October 2021. Employers and trustees of DB schemes should ensure they are well prepared for these significant changes. For background click here to see our March 2021 Pensions Compass article.

Present state of play

Parts of the new provisions have been much criticised.

The DWP has responded by issuing revised draft Regulations for the new CN ground known as the "employer resources test".

TPR has issued a draft Code of Practice indicating the circumstances in which it is likely/unlikely to issue a CN, and is also likely to revise its draft Prosecution Policy for the criminal offences.

Continuing concerns

Much more clarity is needed. Employers with DB schemes need to understand, with advice, whether they are (or are not) likely to be in the firing line under the CNs and/or criminal offences, as well for the new civil penalties regime. These questions are relevant each time the employer contemplates actions which may materially impact the employer covenant e.g. corporate transactions, dividends and security/financing arrangements.

The new criminal offences - extending to "any person" not just the employer and its technically associated persons - are of continuing concern.

Countdown to 1 October 2021

TPR indicates it will aim to clarify and finalise its policies ahead of 1 October 2021. For instance, where TPR's powers overlap it will explain which remedy or remedies it is likely to select - whether criminal prosecution, a CN and/or civil penalties of up to £1 million. TPR also intends to revise its 'Clearance Guidance' to take into account the new CNs (Clearance is unavailable for the criminal offences provisions).

Sound preparation is essential. With legal and other advice, employers and trustees should ensure they understand the new provisions and prepare for them; for instance, by updating their respective risk registers and taking the other steps recommended in our March 2021 Pensions Compass article. Having done so, the new regime should be far less problematic.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

See More Popular Content From

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More