The Pensions Regulator (TPR) has now provided details to the RPBs of IPs who have not sent in their section 120 notices, or have been late in doing so according to their records. Bill mentioned this in his last circular e-mail and we think that it is so likely to be a hot topic for monitors to check on visits that we think that it merits a separate article on the Blog.
You must ensure that highlighted on your checklists and/or in your diaries is the need to send in a section 120 notice to TPR, the Pension Protection Fund and the Scheme Trustees within 14 days of the “insolvency event”, and that you as the office holder ensure that action is taken on time. The key to being able to send it on time is your preparatory work, which should ideally be done pre-appointment. You should always ask the directors whether the company operated a pension scheme, but we have seen a number of instances where the directors either did not know whether there was one or provided just plain inaccurate information. Since you are the one at risk then you don't just accept the directors’ word for it, always make additional enquiries, such as by reviewing the company’s accounts and financial records, or by asking the company’s accountants. To help with this you should include a specific request for information about company pensions in the standard enquiry letter that you send to the company's accountants in your corporate cases.
We have also suggested to IPs that they use the on-line service provided by the Pensions Tracing Service, part of the Department for Work and Pensions, http://www.thepensionservice.gov.uk/atoz/atozdetailed/pensiontracing.asp, but we have now heard that they should not in fact be providing information to IPs and that they are writing stroppy letters to IPs to tell them to stop using the service despite the fact that you have only been requesting the information to help you comply with your statutory duty!
However, they are required to provide this information to either beneficiaries of a pension policy or to people who are authorised by a beneficiary to act on their behalf. Since the directors could be amongst the beneficiaries of a company pension scheme, we suggest that as part of your initial pack of documents when you meet the directors you have a standard letter of authority addressed to the Pensions Tracing Service asking for information about any company pensions and authorising you to act on their behalf. Whilst this will enable you to use the on-line service legitimately, we would suggest that before you use it for the first time you still telephone the Pensions Tracing Team and let them know that you are an IP and that you will only be using the service in cases where you hold specific authority from the directors. That way you should avoid getting a stroppy letter off them for using the service.
The on-line search should only be part of your information gathering exercise, and not the only way you check for pension schemes as otherwise you run the risk of not identifying schemes where it is only the employees who are beneficiaries.
Finally, if you are in doubt as to whether the pension is the type where notice has to be given, then err on the side of caution and still give notice rather than risk a complaint being made.
