The Pensions Regulator

Code of practice 06
Reporting late payment of contributions to personal pensions

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The code of practice

Purpose of this code of practice

1. The main purpose of this code of practice is to give guidelines on reporting late payment of contributions to the Pensions Regulator and to employees. These guidelines apply to managers of personal pensions (including stakeholder plans) where there is a direct payment arrangement. Managers are only required to report late payment of contributions where the late payment is likely to be of material significance to the Pensions Regulator. The code provides examples of when managers should or should not report.
2. The code also gives guidelines for managers on reporting to the Pensions Regulator the non-provision by employers of payment information needed for monitoring purposes.

To whom is this code directed?

3. The code is directed at the managers of personal pension schemes, including stakeholder plans, where there is a direct payment arrangement in place. The code is also relevant to employers in relation to the provision of payment information needed by managers for monitoring purposes.

Terminology

4. As the majority of personal pensions are run by managers rather than trustees, 'managers' is used throughout this document, but references to 'managers' also include trustees of trust-based personal pension schemes.
5. The term 'employee' is generally used rather than 'member' as the policyholders involved are all employees whose employer operates a direct payment arrangement.
6. The legislation requires managers to make reports of late payments which are likely to be of material significance to the Pensions Regulator in the exercise of its functions. In this document, these payments are referred to as 'material' or 'material late payments'.
7. The term 'late payment' describes circumstances where:
   1. the payment is not received at all;
   2. the payment is received, but not on time; or
   3. the payment is not received in full.

   Payments higher than expected but received on time are not late payments.

8. The term 'direct payment arrangement' describes an agreement by the employer to pay:
   1. pension contributions deducted from the employee's pay (referred to as 'employee contributions');
   2. contributions by the employer (if any);
   3. or both of the above

   to the provider of that employee's pension plan.¹

9. References to 'days' mean all days. References to 'working days' do not include Saturdays, Sundays or bank holidays.

Employer information within a reasonable period

10. The Pensions Regulator expects that payment information will normally be provided promptly by employers as part of the normal business arrangements between the employer and manager. Exceptionally, where this is not the case, the managers may make a formal request to employers for information to enable them to monitor the payment of contributions. Employers must provide that information within a reasonable period.²
11. The Pensions Regulator expects that a reasonable period for employers to provide payment information will be within 30 days of the formal request by the managers.

Reporting non-receipt of information within a reasonable period

12. Managers must report to the Pensions Regulator within a reasonable period if they have not received payment information from the employer that they have requested in order to enable them to monitor payments due to the plan ³ and because of that failure are unable to monitor payments. Managers may report to employees the non-provision of payment information by employers but are not required to do so.
13. The Pensions Regulator expects that a reasonable period for managers to report non-receipt will be within 60 days of the formal request. A report should not be made if the manager expects to receive the information shortly.

1 Section 111A(2) Pension Schemes Act 1993.
2 Section 111A Pensions Schemes Act 1993 as amended by section 268(2) Pensions Act 2004.
3 Section 111A(7) Pension Schemes Act 1993 as amended by section 268(2) Pensions Act 2004.

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