Part 1

The Pensions Regulator

Contribution notices where avoidance of employer debt

Section 38 contribution notice: transfer of members of the scheme
39A
1
This section applies where—
a
the Regulator is of the opinion that in relation to a scheme (“
the initial scheme
”) in relation to which section 38 applies—
i
an act or failure to act falling within subsection (5) of that section has occurred (or first occurred) at any time, and
ii
the other conditions in that section for issuing a contribution notice are met in relation to the initial scheme (or, but for any transfer falling within paragraph (b), would be met), and
b
the accrued rights of at least two persons who were members of the initial scheme are transferred at that or any subsequent time to one or more work-based pension schemes (whether by virtue of the act or otherwise).
2
The Regulator may issue a contribution notice under section 38 in relation to any transferee scheme (and, accordingly, any reference in section 40 or 41 to the scheme is to the transferee scheme).
3
In the case of any contribution notice issued by virtue of subsection (2) to any transferee scheme which is not within subsection (5)(a) or (b), section 39 has effect as if any reference in that section to the scheme were a reference to whichever of—
a
the initial scheme, and
b
the transferee scheme,
the Regulator determines to be more appropriate in the circumstances.
4
In any case where section 39 has effect in relation to the transferee scheme by virtue of subsection (3), any reference in that section to a debt under section 75 of the 1995 Act is a reference to so much of that debt as, in the Regulator's opinion, is attributable to those members of the transferee scheme who were members of the initial scheme.
5
In the case of any contribution notice issued by virtue of subsection (2) to any transferee scheme which is—
a
a scheme to which section 75 of the 1995 Act does not apply, or
b
a scheme to which that section does apply in a case where the liabilities of the scheme that would be taken into account for the purposes of that section do not relate to the members of the initial scheme,
the sum specified by the Regulator in the notice is determined in accordance with regulations (and not in accordance with section 39).
6
The Regulator may also issue a direction to the trustees or managers of any transferee scheme requiring them to take specified steps to secure that the sum payable under the notice is applied for the benefit of the members of the transferee scheme who were members of the initial scheme.
7
If the trustees or managers fail to comply with a direction issued to them under subsection (6), section 10 of the 1995 Act (civil penalties) applies to any trustee or manager who has failed to take all reasonable steps to secure compliance.
Ss. 39A, 39B inserted (with effect in accordance with Sch. 9 para. 15(3) of the amending Act) by Pensions Act 2008 (c. 30), s. 149(2)(3), Sch. 9 para. 9 (with Sch. 9 para. 16(1))
Pt. 1 applied in part (with modifications) (20.7.2005 for specified purposes, 1.9.2005 for specified purposes, 5.12.2005 for specified purposes) by The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986), regs. 1(1), 4, Sch. 1 Pt. 1 (as amended (17.7.2008) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008 (S.I. 2008/1903), regs. 1, 5(2), 13; (10.7.2009) by The Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2009 (S.I. 2009/1851), regs. 1, 5, 18; (2.4.2010) by The Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2010 (S.I. 2010/1149), regs. 1, 5, 15)