Clause 43 - Information relevant to the Board

111.     This clause allows the Regulator to collect any information which appears to it to be relevant to the exercise of the functions of the Board of the Pension Protection Fund.

Clause 44 - Duty to notify Regulator of certain events

112.     This clause provides that the trustees or managers of an occupational pension scheme must report any prescribed event in relation to the scheme to the Regulator (unless the Regulator has directed otherwise by order). The report must be made in writing and given as soon as is reasonably practicable after the person reporting has become aware of the notifiable event. The information so collected by the Regulator will assist it in its function of limiting calls on the Pension Protection Fund. Anyone who makes a report under this clause is protected in the event that making such a report would otherwise contravene any other duty imposed on that person - for example, a confidentiality clause in an employment contract. Clause 234 deals with the issue of legal professional privilege.

113.     Subsection (3) provides for Section 10 of the Pensions Act 1995 (civil penalties) to apply to any person who without reasonable excuse fails to comply with the duties imposed on them under this clause.

Reporting duties

Clause 45 - Duty to report breaches of the law

114.     This clause imposes an obligation to report certain breaches of the law (as explained further in the next paragraph) on the following people in relation to an occupational or personal pension scheme: a trustee or manager; a person who is involved in the administration of the scheme; the employer in relation to the scheme; a professional adviser (within the meaning of Part 1 of the Pensions Act 1995) in relation to the scheme; and any other people otherwise involved in advising the trustees or managers of such a scheme in relation to the scheme. These people become statutory whistleblowers.

115.     The people listed above must immediately report in writing to the Regulator any breach of law which is relevant to the administration of the scheme in question and which is likely to be materially significant to the exercise of any of the Regulator's functions. The Regulator must issue a Code of Practice to assist whistleblowers in identifying what is likely to be of material significance.

116.     Subsection (3) provides that anyone who makes a report under this section is protected in the event that making such a report would otherwise contravene any other duty imposed on that person - for example, a confidentiality clause in an employment contract. Clause 233 deals with admissibility of statements and clause 234 with legal professional privilege.

117.     Subsection (5) provides for Section 10 of the Pensions Act 1995 (civil penalties) to apply to any person who without reasonable excuse fails to comply with this clause.

Gathering information

Clause 46 - Provision of information

118.     This clause allows the Regulator to issue a notice requiring trustees, scheme managers, professional advisors, employers or any other person who appears to the Regulator to hold, or to be likely to hold, relevant information to produce a document or provide specified information to the Regulator. The information or document requested must be relevant to the execution of the Regulator's functions.

119.     The information requested in the notice must be provided in such manner and by the time stated by the Regulator in the notice.

Clause 47 - Inspection of premises

120.     This clause provides that an inspector may enter premises which are liable to inspection, to investigate whether specified provisions are being complied with. Premises are liable to inspection if the inspector has reasonable grounds to suspect that members of the scheme are employed there, documents relevant to the administration of the scheme are being kept there, or the administration of the scheme, or work connected with the administration of the scheme, is being carried out there.

Clause 48 - Inspection of premises in respect of employers' obligations

121.     This clause provides that an inspector may enter premises liable to inspection, at any reasonable time, for the purpose of investigating whether an employer is complying with specified requirements. Premises can be inspected if the inspector believes employees are employed there; documents relevant to the administration of the employer's business, the direct payment arrangements, or the scheme to which those payments relate are being kept there; or, either of the following are being carried out on the premises:

•      the administration of the employer's business, the arrangements or the scheme;

•      work connected with administration of the employer's business, the arrangement or the scheme.

Clause 49 - Inspection of premises: powers of inspectors

122.     This clause outlines the powers of the inspectors when inspecting premises. When an inspector enters premises which are liable to inspection he may:

•      make such examination and inquiry as may be necessary;

•      take possession of any document appearing to be relevant to compliance with the regulatory provisions, or take any steps which appear necessary for preserving the document or preventing interference with it;

•      take copies of any document;

•      require any person on the premises to produce, or secure the production of, any relevant document for inspection; and

•      examine, or require to be examined, either alone or in the presence of another person, any person on the premises whom he has reasonable cause to believe to be able to give information relevant to that matter.

Clause 50 - Inspection of premises: supplementary

123.     This clause provides additional provisions in respect of clauses 47, 48 and 49. Premises which are a private dwelling-house not used by, or by permission of, the occupier for the purposes of a trade or business are not liable to inspection. An inspector applying for admission to any premises for the purposes of this clause must produce his certificate of appointment if required to do so. An inspector may when conducting inspections be accompanied by such persons as he considers appropriate. Any document relevant to proceedings may be retained until the conclusion of those proceedings where proceedings are commenced before the end of the retention period of 12 months, otherwise to the end of the retention period. The Regulator may extend the retention period.

Clause 51 - Penalties relating to sections 46 to 49

124.     This clause outlines the penalties where an individual fails to comply with the powers contained in clauses 46, 47,48 and 49.

125.     When an individual without a reasonable excuse:

•      does not comply with a request to provide information when required under clause 43 they will be guilty of an offence which can lead to a fine of up to level 5 on the standard scale;

•      intentionally delays or obstructs an inspector; neglects or refuses to produce a document or answer a question under clauses 47 - 49 they will be guilty of an offence which can lead to a fine of up to level 5 on the standard scale.

126.     An individual charged with refusing to provide information, a document or failing to answer a question can be charged by reference to a time period, failure to comply by that time period can result in another offence (which is for the same circumstance) and can be charged again.

127.     If an individual intentionally alters, suppresses, conceals or destroys a document that they have been asked to produce then they are guilty of an offence which can lead, on summary conviction to a fine not exceeding the statutory maximum, and, on conviction on indictment, to imprisonment, a fine or both.

Clause 52 - Warrants

128.     This clause sets out the conditions in which a Justice of the Peace can issue a warrant. A Justice of the Peace can issue a warrant if satisfied by information given on oath by or on behalf of the Regulator that there are reasonable grounds for believing:

•      there are documents which have been requested under clause 46(1) or clause 49(2)(d), which have not been provided or if the document were requested, it would either not be produced, removed from the premises, hidden, tampered with or destroyed;

•      that an offence has been committed, and an individual will misuse or misappropriation of assets of an occupational pension scheme, an individual is liable to pay a penalty under Section 10 of the Pensions Act 1995 or Section 168(4) of the Pensions Schemes Act 1993, or the person is liable to be banned for as trustee and there is a document related to the offence whether the offence has been committed, and the production is required under clauses 46(1) or clause 49(2)(d).

129.     An inspector with a warrant can take or copy these documents, require named individuals to state where these documents can be found. When executing a warrant a named inspector can be accompanied by anyone he feels necessary. A warrant has a time span of one month from when it was issued.

130.     Any document taken can be retained if it was going to be used in proceedings against an individual until the end of the proceedings or until a period of 12 months. This 12 month period can be extended by another 12 months if the Regulator feels it necessary.

Clause 53 - Sections 46 to 52: interpretation

131.     This clause defines for clauses 46 to 52 "document" and "inspector".

Provision of false or misleading information

Clause 54 - Offences of providing false or misleading information

132.     This clause provides that it is an offence to knowingly or recklessly give the Regulator false or misleading information when the information:

•      is provided in purported compliance with a requirement under clause 37 (the register: duties of trustees and managers); clause 39 (Duty of trustees or managers to provide scheme returns); clause 46 (provision of information); or clause 49 (inspection of premises: powers of inspectors) or,

•      is provided for other circumstances but the person providing the information intends, or could reasonably be expected to know, that it would be used by the Regulator for the purpose of discharging its functions.

133.     A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding the statutory maximum and on conviction on indictment, imprisonment, a fine or both.

Use of information

Clause 55 - Use of information

134.     This clause provides for the Regulator to use occupational or personal pension scheme information it holds, and, information contained in the occupational and personal pension schemes register, for any purpose connected with or incidental to the exercise of its functions.

Disclosure of information

Clause 56 - Restricted information

135.     This clause prevents the Regulator, or any individuals who the Regulator gives restricted information to, from disclosing it unless the Regulator has the consent of the individual who provided the information and anyone whom it relates to, except in circumstances prescribed in clauses 58, 59, 60, 61 and 192.

136.     "Restricted information " is taken to mean any information the Regulator has obtained in carrying out it's regulatory functions with the exception of information which is already in the public domain or information presented in a way in which the identity of an individual could not be determined. Disclosure of restricted information is an offence.

Clause 57 - Information supplied to the Regulator by corresponding overseas authorities

137.     For the purpose of clause 55 "restricted information" includes information given to the Regulator by any corresponding overseas authority. Clauses 58 to 61 do not apply to information given to the Regulator by any corresponding overseas authority. The Regulator can only disclose this information if it enables or assists the Regulator in the discharge of its functions, or for the purpose of criminal proceedings.

Clause 58 - Disclosure for facilitating exercise of functions by the Regulator

138.     This clause allows the Regulator to disclose information to a qualified individual where the Regulator needs to seek advice on a technical matter (for example on a matter of law or accountancy practice) if the Regulator believes that it needs that advice to properly exercise its functions.

Clause 59 - Disclosure for facilitating exercise of functions of Board

139.     This clause allows the Regulator to disclose restricted information for the purpose of aiding the Board to carry out its functions.

Clause 60 - Disclosure for facilitating exercise of functions by other supervisory authorities

140.     This clause allows the Regulator to disclose restricted information to any individual specified in the first column of Schedule 3 if the Regulator considers that it would enable or assist that person in exercising their functions listed in column two of Schedule 3. Schedule 3 may be amended by the Secretary of State, by Order, after consultation with the Regulator.

Clause 61 - Other permitted disclosures

141.     This clause sets out other circumstances where the Regulator can disclose information. These include disclosure:

•      to the Secretary of State, the Inland Revenue or the Department for Social Development in Northern Ireland if the Regulator believes it is in the interest of scheme members or in the public interest;

•      for the purpose of any criminal proceedings arising from the specified provisions, in disciplinary proceedings relating to carrying out professional duties by a solicitor, an actuary, an accountant or an insolvency practitioner;

•      in relation to disciplinary proceedings against a public servant;

•      in assisting an authority in a country outside the United Kingdom to carry out functions in this Bill and the Pensions Act 1995; or

•      in the pursuance of a Community obligation.

142.     The Regulator is not prevented from disclosing information to the Director of Public Prosecutions, the Director of Public Prosecutions for Northern Ireland; the Lord Advocate; a procurator fiscal; or a constable.

143.     The Regulator is not prevented from disclosing restricted information where disclosure is required by law, or to a trustee which the Regulator has appointed if the information is required by him to carry out his work.

144.     The person the Regulator gives information to is able to onwardly disclose it with the permission of the Regulator. Also any person listed in Schedule 3 can disclose information to other supervising authorities with the consent of the Regulator for the purpose of carrying out functions listed in the second column of Schedule 3. Before the Regulator gives consent to a party to disclose information the Regulator must take into account representations made by that party in respect of the need for the disclosure.

Clause 62 - Disclosure of information by the Inland Revenue

145.     This clause relates to disclosure of information by the Inland Revenue. It provides that the Inland Revenue will not be bound by the restrictions imposed by section 182 of the Finance Act 1989 so long as the information is used by the Regulator to discharge it's functions. When the Inland Revenue discloses information to the Regulator, the Regulator should treat it as "restricted information". The Regulator must not disclose this information unless the Commissioners of the Inland Revenue or Customs and Excise have given permission or in the case of criminal proceedings being brought under this Bill, the Pensions Act 1995 or the Pension Schemes Act 1993.

Reports

Clause 63 - Publishing reports

146.     This clause enables the Regulator to publish reports in any form, on the action taken or investigation into the consideration of taking action. Examples of such reports may be the publication of a decision to exercise a function - to appoint a trustee, or a report of particularly good practice discovered by the Regulator.

Codes of practice

Clause 64 - Codes of practice

147.     This clause gives the Regulator a new power to issue Codes of Practice for the purpose of providing practical guidance with respect to compliance with any requirements imposed on people by pensions legislation. Subsection (2) of this clause outlines the areas where the Regulator must provide Codes of Practice as being:

•      what constitutes a "reasonable period" for the purposes of any provision of the pensions legislation which requires any action to be taken within such a period;

•      the discharge of the duty to report breaches of the law (under clause 45);

•      the discharge of the duties imposed by clauses 196 and 197 (member-nominated trustees and directors);

•      the discharge of duties imposed by clauses 200 and 201;

•      the discharge of duty imposed by Section 111A (7A) of the Pension Schemes Act 1993 (duty of trustees or managers of personal pension schemes to report material failures to pay employer contributions timeously);

•      the discharge of duty imposed by section 49(9) of the Pensions Act 1995 (duty of trustees or managers of occupational pension schemes to report material failures by employers to pay employer contributions deducted from employees earnings timeously);

•      The discharge of the duty imposed by clause 184 of this Bill or section 88(1) of the Pensions Act 1995 (duties of trustees and managers of occupational pension schemes to report failures to pay employer contributions timeously);

•      in relation to other such matters as are prescribed for the purposes of this clause.

148.     By virtue of subsections (3) and (4), the Regulator is given a power to revise from time to time the whole or any part, of a Code of Practice issued by it subject to the same procedure as applies for issuing a Code of Practice (see notes on clause 65). The Regulator also has the power to revoke a Code of Practice, again subject to statutory procedures (see notes on clause 66).

149.     Breach of a Code of Practice will not, of itself, result in legal proceedings. However, such a Code of Practice is admissible in evidence in any legal proceedings. The Regulator may frame any direction by reference to a Code of Practice (clause 14). A court or Tribunal should take into account the provisions of the Code of Practice. This means that, should the Regulator allege a breach of pensions legislation against a person, that person's failure to follow the relevant Code of Practice may be taken as evidence that the legislation has been breached.

Clause 65 - Procedure for issue and publication of codes of practice

150.     Before a Code of Practice (including a revised Code of Practice) can be issued by the Regulator, a draft of the Code must be published for consultation with people whom the Regulator considers appropriate, and anyone further whom the Secretary of State requires the Regulator to consult. In the event a new Code of Practice serves the purpose of consolidating other such Codes of Practice or, if the Secretary of State for reasons of urgency considers it inappropriate for consultation to occur, then no draft of the Code of Practice will be issued for consultation.

151.     Before a draft Code of Practice may be issued, the Regulator must send it to the Secretary of State who will either lay it before Parliament (if he approves of it) or will publish details of his reasons for withholding consent (if he does not approve of it). If a draft Code of Practice is laid before Parliament (for the time period as set out in subsection (7)) and no resolution is passed by either House, then the draft Code of Practice can be issued by the Regulator. However, if either House so resolves, then no further action can be taken on the draft Code of Practice (although this will not prevent a new draft of this Code of Practice being laid before Parliament).

152.     As provided by subsection (10), for any Code of Practice issued under clause 64, the Regulator must arrange for it to be published in the most appropriate manner. Subsection (11) of this clause provides that the Regulator may charge a reasonable fee for giving people a copy of a Code of Practice.

Clause 66 - Revocation of codes of practice

153.     This clause provides for the Secretary of State to revoke, by order, a Code of Practice (issued under clause 64). A code can only be revoked with the agreement of the Regulator.

Exercise of regulatory functions

Clause 67 - The Regulator's procedure in relation to its regulatory functions

154.     The Regulator must determine the procedures that it will follow in discharging its regulatory functions including clause 14 (improvement notices), clause 15 (third party notices), Schedule 2 (the reserved regulatory functions) and the power to make orders under Section 7 of the Pensions Act 1995 and any other functions prescribed to the Regulator.

155.     The Determinations Panel will determine its own procedures.

156.     Procedures determined must provide for those under clause 70 (standard procedure) and clause 72 (special procedure).

Clause 68 - Publication of procedure in relation to regulatory functions

157.     By virtue of this clause, the Regulator must publish the normal procedure where notice is given; special procedure where not notice is given; and any other procedures that the Regulator feels are necessary to define under clause 67. These must be published in a way that is easily accessible to the public and the Regulator can make a small charge to anyone requesting a copy. These publications must be kept up to date with any changes made in procedure and the procedure must be used by the Regulator in carrying out it's functions. However, failure to do so does not affect the validity of the carrying out of the regulatory functions in question but may be taken into account by a determination by the tribunal.

Clause 69 - Application of standard and special procedure

158.     Where the Regulator considers that the exercise of one or more of its regulatory functions may be appropriate or, where an application is made under any of the provisions listed in clause 11(6) (functions exercisable by the Determinations Panel) the requirements of the procedures set out in clause 70 (standard procedure ) and clause 72 (special procedure) will apply.

159.     Neither clause 70 (standard procedure) and clause 72 (special procedure) will apply in relation to a determination whether to exercise a regulatory function when a review is conducted under clause 73 (compulsory review).

Clause 70 - Standard procedure

160.     This clause specifies what needs to be included in the statement of procedure in normal circumstances where notice is given, i.e. that the individuals directly affected by the regulatory action are informed and that they are given a chance to make representations. The Regulator has to take consideration of this evidence and notify the individuals concerned of its decision on whether or not to take the proposed action (a determination notice). If the proposed action is taken forward, the determination notice must contain: the right of referral to The Pensions Regulator Tribunal; the form and content of further warnings and determination notices; when they will be given, and any time limits which apply throughout this process.

161.     Subsection (3) states that the determination notice may be referred to the Pensions Regulator Tribunal either by anyone named in the determination notice or anyone who in the view of the tribunal is affected by the notice.

162.     Subsection (4) provides that the determination notice cannot come into effect in the period during which individuals have the right to have the determination referred to the tribunal or if it is referred while the tribunal process is ongoing. However, subsection (4) does not apply to the following sections of the Pensions Act 1995: the power to make or revoke an order under Section 3 (prohibiting a person from being a trustee); the power to make or revoke an order under Section 4 (suspending a trustee); the power under Section 7 to appoint a trustee; and Section 29(5) to wave a disqualification under that Act.