Pensions Bill

House of Commons

Session 2007 - 08
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Other Bills before Parliament

Pensions Bill

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 2 — Compliance
15

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Third party compliance notices
(1)
The Regulator may issue a third party compliance notice if it is of the opinion
that—
(a)
an employer has contravened one or more of the employer duty
provisions,
5
(b)
the contravention is or was, wholly or partly, a result of a failure of
another person (the “third party”) to do any thing, and
(c)
that failure is not itself a contravention of any of the employer duty
provisions.
(2)
A third party compliance notice is a notice directing the third party to take, or
10
refrain from taking, the steps specified in the notice in order to remedy the
contravention or prevent a recurrence of the failure.
(3)
A third party notice may, in particular—
(a)
state the period within which any step must be taken;
(b)
require the third party to inform the Regulator, within a specified
15
period, how the third party has complied or is complying with the
notice.
(4)
A third party notice may give the third party a choice between different ways
of remedying or preventing the recurrence of the third party’s failure.
33
Unpaid contributions notices
20
(1)
The Regulator may issue an unpaid contributions notice to an employer if it is
of the opinion that relevant contributions have not been paid on or before the
due date.
(2)
An unpaid contributions notice is a notice requiring an employer to pay into a
pension scheme by a specified date an amount in respect of unpaid relevant
25
contributions.
(3)
Relevant contributions are contributions payable to a pension scheme by or on
behalf of an employer—
(a)
on the employer’s own account (but in respect of the jobholder), or
(b)
on behalf of the jobholder out of deductions from the jobholder’s
30
earnings.
(4)
“Due date” has the meaning prescribed by regulations.
(5)
An unpaid contributions notice may, in particular—
(a)
specify the scheme to which the contributions are due;
(b)
specify the jobholders, or category of jobholders, in respect of whom
35
the contributions are due;
(c)
state the period in respect of which the contributions are due;
(d)
state the due date in respect of the contributions;
(e)
require the employer to take such other steps in relation to remedying
the failure to pay the contributions as the Regulator considers
40
appropriate;
(f)
state that if the employer fails to comply with the notice, the Regulator
may issue a fixed penalty notice under section 35.

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 2 — Compliance
16

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Calculation and payment of contributions
(1)
This section applies to—
(a)
a compliance notice issued to an employer in respect of a failure to
comply with an enrolment duty;
(b)
an unpaid contributions notice.
5
(2)
The notice may, in particular, include—
(a)
a requirement to calculate the amount of relevant contributions that
have not been paid to the scheme;
(b)
if the contributions are being paid within the prescribed period after the
due date, a requirement to pay an amount equal to the amount of
10
unpaid relevant contributions within section 33(3)(a);
(c)
if the contributions are not being paid within the prescribed period
after the due date, a requirement to pay (on the employer’s own
account) an amount equal to the amount of unpaid relevant
contributions;
15
(d)
if paragraph (b) applies, a requirement to ensure—
(i)
that the jobholder is not required to pay an amount equal to the
balance of the unpaid relevant contributions during the
prescribed period, and
(ii)
that, if the jobholder chooses to pay that amount, it may be paid
20
in instalments.
(3)
The Secretary of State may by regulations make provision about the way in
which the Regulator may (without prejudice to subsection (2)(a)) estimate the
amount of contributions that an employer has failed to pay in respect of a
jobholder.
25
(4)
Regulations under subsection (3) may include, in particular, provision about
the sources of information that the Regulator may use in estimating that
amount, other than information provided by the employer.
Penalty notices
35
Fixed penalty notices
30
(1)
The Regulator may issue a fixed penalty notice to a person if it is of the opinion
that the person has failed to comply with—
(a)
a compliance notice under section 31,
(b)
a third party compliance notice under section 32,
(c)
an unpaid contributions notice under section 33, or
35
(d)
a notice issued under section 72 of the Pensions Act 2004 (c. 35)
(provision of information).
(2)
The Regulator may issue a fixed penalty notice to a person if it is of the opinion
that the person has contravened—
(a)
any provision of regulations under section 3(2) or 5(2) (prescribed
40
arrangements for automatic enrolment or re-enrolment),
(b)
any provision of regulations under section 6(4) (prescribed
arrangements: jobholder’s right to opt in),
(c)
section 7(3) and (4) (refund of contributions if jobholder opts out of
scheme membership), and any provision of regulations under those
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subsections,

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 2 — Compliance
17

(d)
section 9 (requirement to give information to jobholders), and any
provision of regulations under that section, or
(e)
any provision of regulations under section 43 (requirement to keep
records).
(3)
A fixed penalty notice is a notice requiring the person to whom it is issued to
5
pay a penalty within the period specified in the notice.
(4)
The penalty—
(a)
is to be determined in accordance with regulations, and
(b)
must not exceed £50,000.
(5)
A fixed penalty notice must—
10
(a)
state the amount of the penalty;
(b)
state the date, which must be at least 4 weeks after the date on which
the notice is issued, by which the penalty must be paid;
(c)
state the period to which the penalty relates;
(d)
if the notice is issued under subsection (1), specify the failure to which
15
the notice relates;
(e)
if the notice is issued under subsection (2), specify the provision or
provisions that have been contravened;
(f)
if the notice is issued under subsection (1), state that, if the failure to
comply continues, the Regulator may issue an escalating penalty notice
20
under section 36;
(g)
notify the employer of the review process under section 38 and the right
of appeal under section 39.
36
Escalating penalty notices
(1)
The Regulator may issue an escalating penalty notice to a person if it is of the
25
opinion that the person has failed to comply with—
(a)
a compliance notice under section 31,
(b)
a third party compliance notice under section 32,
(c)
an unpaid contributions notice under section 33, or
(d)
a notice under section 72 of the Pensions Act 2004 (c. 35) (provision of
30
information).
(2)
But the Regulator may not issue an escalating penalty notice if—
(a)
it relates to failure to comply with a notice within subsection (1)(a), (b)
or (c), the person to whom that notice was issued has applied for a
review of it under section 38, and any review has not been completed;
35
(b)
it relates to failure to comply with any notice within subsection (1), the
person has exercised the right of appeal under section 39 against a fixed
penalty notice issued in relation to that notice, and the appeal has not
been determined.
(3)
An escalating penalty notice is a notice requiring a person to pay an escalating
40
penalty if the person fails to comply with a notice referred to in subsection (1)
before a specified date.
(4)
An escalating penalty is a penalty which is calculated by reference to a
prescribed daily rate.
(5)
The prescribed daily rate—
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Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 2 — Compliance
18

(a)
is to be determined in accordance with regulations, and
(b)
must not exceed £10,000.
(6)
An escalating penalty notice must—
(a)
specify the failure to which the notice relates;
(b)
state that, if the person fails to comply with the notice referred to in
5
subsection (1) before a specified date, the person will be liable to pay an
escalating penalty;
(c)
state the daily rate of the escalating penalty and the way in which the
penalty is calculated;
(d)
state the date from which the escalating penalty will be payable, which
10
must not be earlier than the date specified in the fixed penalty notice
under section 35(5)(b);
(e)
state that the escalating penalty will continue to be payable at the daily
rate until the date on which the person complies with the notice
referred to in subsection (1) or such earlier date as the Regulator may
15
determine;
(f)
notify the person of the review process under section 38 and the right
of appeal under section 39.
37
Penalty notices: recovery
(1)
Any penalty payable under section 35 or section 36 is recoverable by the
20
Regulator.
(2)
In England and Wales, any such penalty is, if a county court so orders,
recoverable under section 85 of the County Courts Act 1984 (c. 28) or otherwise
as if it were payable under an order of that court.
(3)
In Scotland, a fixed penalty notice or escalating penalty notice is enforceable as
25
if it were an extract registered decree arbitral bearing a warrant for execution
issued by the sheriff court of any sheriffdom in Scotland.
(4)
The Regulator must pay into the Consolidated Fund any penalty recovered
under this section.
Review and appeal
30
38
Review of notices
(1)
The Regulator may review a notice to which this section applies—
(a)
on the written application of the person to whom the notice was issued,
or
(b)
if the Regulator otherwise considers it appropriate.
35
(2)
This section applies to—
(a)
a compliance notice issued under section 31;
(b)
a third party compliance notice issued under section 32;
(c)
an unpaid contributions notice issued under section 33;
(d)
a fixed penalty notice issued under section 35;
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(e)
an escalating penalty notice issued under section 36.
(3)
Regulations may prescribe the period within which—
(a)
an application to review a notice may be made under subsection (1)(a);

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 2 — Compliance
19

(b)
a notice may be reviewed under subsection (1)(b).
(4)
The Regulator may suspend the effect of a notice until any review of that notice
is completed.
(5)
In carrying out a review, the Regulator must consider any representations
made by the person to whom the notice was issued.
5
(6)
The Regulator’s powers on a review include power to—
(a)
confirm, vary or revoke the notice;
(b)
substitute a different notice.
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References to the Pensions Regulator Tribunal
(1)
A person to whom a notice is issued under section 35 or section 36 may make
10
a reference to the Pensions Regulator Tribunal in respect of—
(a)
the issue of the notice;
(b)
the amount of the penalty payable under the notice.
(2)
The Secretary of State may by regulations make provision—
(a)
as to the manner in which, and the time within which, a reference under
15
subsection (1) may be made;
(b)
as to the procedure which is to be followed if such a reference is made;
(c)
as to the powers of the Pensions Regulator Tribunal in relation to such
a reference.
(3)
In section 102(2) of the Pensions Act 2004 (c. 35) (functions of the Pensions
20
Regulator Tribunal)—
(a)
the words from “by this Act” to the end become paragraph (a);
(b)
at the end insert—
“(b)
by section 39 of the Pensions Act 2008 or any provision
in force in Northern Ireland corresponding to that
25
section.”
Offences
40
Offences of failing to comply
(1)
An offence is committed by an employer who wilfully fails to comply with—
(a)
the duty under section 3(2) (automatic enrolment),
30
(b)
the duty under section 5(2) (automatic re-enrolment), or
(c)
the duty under section 6(3) (jobholder’s right to opt in).
(2)
A person guilty of an offence under this section is liable—
(a)
on conviction on indictment, to imprisonment for a term not exceeding
two years, or to a fine, or both;
35
(b)
on summary conviction to a fine not exceeding level 5 on the standard
scale.
41
Offences of providing false or misleading information
In section 80(1)(a) of the Pensions Act 2004 (offences of providing false or

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 2 — Compliance
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misleading information) at the end of sub-paragraph (iv) insert “or
“(v)
regulations under section 10 of the Pensions Act 2008,”.
42
Monitoring of employers’ payments to personal pension schemes
In section 111A of the Pension Schemes Act 1993 (c. 48), at the end insert—
“(18)
In this section, “employee” includes a jobholder within the meaning of
5
section 1 of the Pensions Act 2008 and “employer” is to be read
accordingly.”
Records and information
43
Requirement to keep records
(1)
For the purposes of Chapter 1 of this Part, or this Chapter, the Secretary of State
10
may by regulations make provision requiring any person—
(a)
to keep, in such form and manner as may be prescribed, such records
as may be prescribed;
(b)
to preserve those records for such period, not exceeding 6 years, as may
be prescribed;
15
(c)
to provide those records, on request, to the Regulator.
(2)
Regulations under subsection (1) may provide that section 10 of the Pensions
Act 1995 (c. 26) applies to a person who fails to comply with those
requirements.
44
Powers to require information and to enter premises
20
(1)
The Pensions Act 2004 (c. 35) is amended as follows.
(2)
In section 72, after subsection (1) insert—
“(1A)
If the Regulator requires information which is relevant to the exercise
of its functions under Chapter 2 of Part 1 of the Pensions Act 2008, the
Regulator may, by notice in writing, require a person to whom
25
subsection (2) applies—
(a)
to furnish the Regulator with an explanation of any document
or information required under subsection (1);
(b)
to attend before the Regulator at such time and place as may be
specified in the notice under that subsection to furnish any such
30
explanation.
(1B)
The Regulator may not require a person to answer any question or
furnish any information which might incriminate the person or, if
married or a civil partner, the person’s spouse or civil partner.”
(3)
In section 74, before subsection (1) insert—
35
“(A1)
An inspector may, for the purposes of investigating whether an
employer is complying, or has complied, with the requirements under
Chapter 1 of Part 1 of the Pensions Act 2008, at any reasonable time
enter premises liable to inspection.
(B1)
Premises are liable to inspection for the purposes of subsection (A1) if
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the inspector has reasonable grounds to believe that—

Pensions Bill
Part 1 — Pension scheme membership for jobholders
Chapter 2 — Compliance
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(a)
employees of the employer are employed there,
(b)
documents relevant to any of the following are being kept
there—
(i)
the administration of the employer’s business,
(ii)
the duties of the employer under Chapter 1 of Part 1 of
5
the Pensions Act 2008,
(iii)
the administration of a qualifying scheme, or
(c)
the administration of the employer’s business, or work
connected with that administration, is being carried out there.
(C1)
In subsections (A1) and (B1)—
10
“employer” and “employee” have the meaning given by section 77
of the Pensions Act 2008;
“qualifying scheme” has the meaning given by section 15 of that
Act.”
(4)
In section 75(1), after “subsection” (in the third place where it occurs) insert
15
“(A1),”.
(5)
In section 76(9), after “subsection” (in the second place where it occurs) insert
“(A1),”.
45
Disclosure of tax information etc
(1)
In the Pensions Act 2004 (c. 35) for section 88 (tax information) substitute—
20
“88
Tax information etc
(1)
This section applies to information held by the Revenue and Customs
if it is held by them in connection with a function of the Revenue and
Customs that relates to any of these matters—
(a)
tax or duty;
25
(b)
national insurance contributions;
(c)
the national minimum wage.
(2)
An officer of Revenue and Customs may disclose to the Regulator
information to which this section applies, if the disclosure is made for
the purpose of enabling or assisting the Regulator to discharge its
30
functions.
(3)
Where information to which this section applies is disclosed to the
Regulator by virtue of subsection (2) above or section 19 of the Anti-
terrorism, Crime and Security Act 2001 (disclosure of information held
by revenue departments), it must, subject to subsections (4) and (5), be
35
treated for the purposes of section 82 as restricted information.
(4)
Information to which this section applies which is disclosed to the
Regulator as mentioned in subsection (3) may not be disclosed by the
Regulator or any person who receives the information directly or
indirectly from the Regulator except—
40
(a)
to, or in accordance with authority given by, the Commissioners
for Her Majesty’s Revenue and Customs,
(b)
with a view to the institution of, or otherwise for the purposes
of, any criminal proceedings,