EXPLANATORY NOTE
(This note is not part of the Order)
This Order provides for the coming into operation of certain provisions of the Pension Schemes Act 2021 (“the Act”). This Order also contains transitional and saving provisions in relation to the provisions of the Act being brought into operation by this Order.
Article 2(2) appoints the day for the coming into operation of paragraph 15(2) of Schedule 11 to the Act (administration charges) for the purpose only of authorising the making of regulations by the Department for Communities as 29th September 2021 and for all other purposes is immediately before 1st October 2021.
In addition, Article 2 appoints the day for the coming into operation of the following provisions of the Act as 1st October 2021 subject to prescribed exceptions: paragraphs 3 (reasonableness of issuing a contribution notice), 4 (determination of a sum specified in a contribution notice), 5 (sanctions for failure to comply with a contribution notice), 6 (sanctions for avoidance of employer debt etc), 7 (duty to notify the Regulator of certain events), 10 (inspection of premises), 12 (provision of false or misleading information to the Regulator), 13 (provision of false or misleading information to trustees or managers), 14 (financial penalties) and 15 to 26 (minor and consequential amendments) of Schedule 8 and paragraph 15(3) of Schedule 11. It also commences paragraphs 2 (grounds for issuing an Article 34 contribution notice), 9 (interviews) and 11 (fixed penalty notices and escalating penalty notices) of Schedule 8 for all remaining purposes.
Paragraph 2 of Schedule 8 to the Act amends Article 34 of the 2005 Order and inserts Articles 34C to 34F which introduce the new employer insolvency test and employer resources test in connection with the contribution notice regime set out at Articles 34 to 38 of the 2005 Order.
Paragraph 3 of Schedule 8 (reasonableness of issuing a contribution notice) to the Act amends Article 34 of the 2005 Order by inserting additional matters the Pensions Regulator (“the Regulator”) can consider when deciding whether to impose a liability on a person to pay a contribution notice issued under Article 34 of the 2005 Order (“contribution notice”).
Paragraph 4 of Schedule 8 (determination of a sum specified in a contribution notice) to the Act amends Article 35 of the 2005 Order by substituting the relevant time for the purpose of determining the sum specified in a contribution notice.
Paragraph 5 of Schedule 8 (sanctions for failure to comply with a contribution notice) to the Act amends Article 36 and 37 of the 2005 Order and inserts Articles 38A and 38B which introduce a new offence and financial penalty for failure to comply with a contribution notice.
Paragraph 6 of Schedule 8 (sanctions for avoidance of employer debt etc.) to the Act inserts Articles 54A to 54D into the 2005 Order which introduce two new offences and two new financial penalties for avoidance of employer debt and conduct risking accrued scheme benefits.
Paragraph 7 of Schedule 8 (duty to notify the Regulator of certain events) to the Act amends Article 64 of the 2005 Order and substitutes the existing financial penalty the Regulator may issue under Article 10 of the Pensions (Northern Ireland) Order 1995 (S.I. 1995/3213 (N.I. 22)) with the new financial penalty at Article 83A of the 2005 Order. It also amends Article 75 of the 2005 Order to create an offence for providing false or misleading information to the Regulator in relation to the duty to notify the Regulator under Article 64 of the 2005 Order.
Paragraph 9 of Schedule 8 (interviews) to the Act inserts Article 67A into the 2005 Order and introduces a power to enable the Pensions Regulator to require individuals to attend an interview. It also repeals the existing Article 67(1A) and (1B) which enables the Regulator to require persons to provide information or attend an interview in relation to matters relating to automatic enrolment or Master Trusts. It also amends Article 72 of the 2005 Order to create an offence for neglecting or refusing to attend an interview before the Regulator without a reasonable excuse.
Paragraph 10 of Schedule 8 (inspection of premises) to the Act amends Article 68 of the 2005 Order to enable the Regulator to inspect premises, including the premises of a sponsoring employer of a pension scheme, for a wider range of purposes.
Paragraph 11 of Schedule 8 (fixed penalty notices and escalating penalty notices) to the Act inserts Articles 72A (fixed penalty notices) and 72B (escalating penalty notices) into the 2005 Order, which introduce powers to enable the Pensions Regulator to impose fixed penalty notices and escalating penalty notices for failures to comply with any of the obligations under Article 67, 67A 68, 69 (inspection of premises in respect of employer’s obligations) or 70 (inspection of premises: powers of inspectors) of the 2005 Order.
Paragraph 12 of Schedule 8 (provision of false or misleading information to the Regulator) inserts Article 75A (financial penalty for providing false or misleading information to the Regulator) into the 2005 Order which introduces a new financial penalty for providing false or misleading information to the Regulator where the information is provided in purported compliance with a specific requirement.
Paragraph 13 of Schedule 8 (provision of false or misleading information to trustees or managers) inserts Article 75B (financial penalty for providing false or misleading information to trustees or managers) into the 2005 Order which introduces a new financial penalty for providing false or misleading information to the trustees or managers of a scheme where the information is provided in purported compliance in specified circumstances.
Paragraph 14 of Schedule 8 (financial penalties) inserts Articles 83A, 83B (financial penalties: time for recovery) and 83C (financial penalties: recovery) into the 2005 Order which introduce a power for the Regulator to impose a financial penalty. It also provides that where a financial penalty is issued under Article 83B and at that time, the person on which the penalty is being imposed is also subject to one or more contribution notices, the Regulator may not seek to recover the financial penalty until such time as when the contribution notice has been paid, the specified date for payment of the contribution notice has past or, if earlier, the date on which the recipient of the financial penalty experiences a qualifying insolvency event.
Paragraph 15(2) of Schedule 11 to the Act (administration charges) amends the definition of “administration charges” in paragraph 1(5) of Schedule 18 to the Pensions Act (Northern Ireland) 2015 (c. 5 (N.I.)) (power to restrict charges or impose requirements in relation to schemes) to clarify its scope. Paragraph 15(3) of Schedule 11 to the Act amends section 109 of the Pension Schemes (Northern Ireland) Act 1993 (c. 49) (disclosure of information about schemes to members, etc.) to make it clear that transaction costs are a form of administration charge.
Schedule 8 to the Act also makes minor and consequential amendments to other legislation.
Articles 3 to 7 make transitional provisions setting out how Articles 34 to 37, Articles 54A to 54D, Article 64, Articles 72A and 72B and Articles 83A to 83C of the 2005 Order and paragraphs 12 and 13 of Schedule 8 to the Act apply where the act, failure to act or course of conduct in question occurred before 1st October 2021.
Article 8 contains a saving measure to enable Article 10 of the Pensions (Northern Ireland) Order 1995 to continue to apply in relation to any non-compliance with the duty to notify the Regulator of any notifiable events pursuant to Article 64 of the 2005 Order arising before 1st October 2021.
Article 9 contains a saving measure to enable Article 67(1A) and (1B) of the 2005 Order to continue to have effect after the repeal of these provisions where a notice to attend an interview has been issued and the duty imposed has not yet been discharged.
Article 10 contains a saving measure to ensure that the meaning of “administration charge” in section 39 of the Pension Schemes Act (Northern Ireland) 2021 (prior to the commencement of the amendments made by paragraph 15(2) of Schedule 11 to the Act) continues to have effect. This measure will cease to have effect on 5th April 2022.