PART 3The Pensions Regulator

Contribution notices where avoidance of employer debt etc

106Sanctions for failure to comply with a contribution notice

(1)

The Pensions Act 2004 is amended as follows.

(2)

In section 40 (content and effect of a section 38 contribution notice)—

(a)

after subsection (2) insert—

“(2A)

Without prejudice to subsections (3) and (7), the contribution notice must also specify a date for the purposes of sections 42A(2) and 42B(2) (sanctions for failure to comply with a contribution notice).”;

(b)

in subsection (9), after paragraph (b) (and before the “and”) insert—

“(ba)

specifies the same date for the purposes of sections 42A(2) and 42B(2) as is specified in P’s contribution notice,”.

(3)

In section 41 (section 38 contribution notice: relationship with employer debt)—

(a)

after subsection (8) insert—

“(8A)

An application under subsection (7) may not be made after—

(a)

the date specified under section 40(2A) for the purposes of sections 42A(2) and 42B(2) (sanctions for failure to comply with a contribution notice), or

(b)

if a different date has effect instead of that date (see subsections (10A) and (11B)), that different date.”;

(b)

after subsection (10) insert—

“(10A)

Where an application under subsection (7) is made to the Regulator, the Regulator may, if it is of the opinion that it is appropriate to do so—

(a)

change the date that has effect for the purposes of sections 42A(2) and 42B(2) (whether specified in the contribution notice or an earlier revised contribution notice), and

(b)

specify the revised date in the revised contribution notice issued under subsection (9)(b) or, if the Regulator does not issue a revised contribution notice under subsection (9)(b), issue a revised contribution notice specifying the revised date.”;

(c)

after subsection (11) insert—

“(11A)

Subsection (11B) applies where—

(a)

P’s contribution notice specifies that P is jointly and severally liable for the debt with other persons, and

(b)

the Regulator issues a revised contribution notice to P under subsection (9)(b) or (10A)(b) specifying a revised date for the purposes of sections 42A(2) and 42B(2).

(11B)

Where this subsection applies, the Regulator must—

(a)

change the date that has effect for the purposes of sections 42A(2) and 42B(2) in the case of the contribution notices or revised contribution notices issued in respect of the debt to those other persons, and

(b)

specify the revised date in the revised contribution notices issued to those other persons under subsection (11) or, if the Regulator does not issue revised contribution notices under subsection (11), issue revised contribution notices to those other persons specifying the revised date.”

(4)

After section 42 insert—

“42AOffence of failing to comply with a section 38 contribution notice

(1)

This section applies where a contribution notice is issued to a person under section 38.

(2)

If the person, without reasonable excuse, fails to pay the debt due by virtue of the contribution notice to—

(a)

the trustees or managers of the scheme, or

(b)

the Board of the Pension Protection Fund (as the case may be),

before the date specified in the contribution notice for the purposes of this subsection (see section 40(2A)), the person is guilty of an offence.

(3)

A person guilty of an offence under subsection (2) is liable—

(a)

on summary conviction in England and Wales, to a fine;

(b)

on summary conviction in Scotland, to a fine not exceeding level 5 on the standard scale.

(4)

Proceedings for an offence under subsection (2) may not be instituted if an application under section 41(7) has been made—

(a)

in relation to the contribution notice, or

(b)

in relation to a contribution notice which is a corresponding contribution notice for the purposes of section 40(8),

and the application has not been determined, withdrawn or abandoned.

(5)

Proceedings for an offence under subsection (2) may be instituted in England and Wales only—

(a)

by the Regulator or the Secretary of State, or

(b)

by or with the consent of the Director of Public Prosecutions.”

(5)

After section 42A (inserted by subsection (4)) insert—

“42BFinancial penalty for failure to comply with a section 38 contribution notice

(1)

This section applies where a contribution notice is issued to a person under section 38.

(2)

Section 88A (financial penalties) applies to the person if the person, without reasonable excuse, fails to pay the debt due by virtue of the contribution notice to—

(a)

the trustees or managers of the scheme, or

(b)

the Board of the Pension Protection Fund (as the case may be),

before the date specified in the contribution notice for the purposes of this subsection (see section 40(2A)).

(3)

The Regulator may not issue a warning notice to the person in respect of the imposition of a penalty under section 88A as it applies by virtue of subsection (2) if an application under section 41(7) has been made—

(a)

in relation to the contribution notice, or

(b)

in relation to a contribution notice which is a corresponding contribution notice for the purposes of section 40(8),

and the application has not been determined, withdrawn or abandoned.

(4)

In this section “warning notice” means a notice given as mentioned in section 96(2)(a).”