DB Pension Scheme Employers – Proposed New Notification Obligations – Employment and HR

The government is consulting on regulations that (a) make changes to the list
of employer notifiable events and (b) prescribe the events
affecting a DB scheme employer in respect of which a notice and
accompanying statement (often referred to as a “declaration of
intent”) must be given to the Pensions Regulator (TPR) and the
scheme trustees. The regulations are intended to come into force on
6 April 2022.

Changes to the list of employer notifiable events

The regulations remove wrongful trading from the list of
employer notifiable events and add two new employer notifiable
events:

• A decision in principle by the employer to sell a material
  proportion of its business or assets.




• A decision in principle by the employer to grant or extend a
  security over its assets where that grant/extension would result in
  the secured creditor being ranked above the scheme in the order of
  priority for debt recovery.

New “declaration of intent” requirements

The Pension Schemes Act 2021 will introduce a requirement for
employers to give notice to TPR of certain prescribed events in
relation to the employer of a DB scheme and to provide an
accompanying statement about the impact of the event on the scheme
(often referred to as a “declaration of intent”). A copy
of the notice and the accompanying statement must also be given to
the trustees of the scheme at the same time that they are given to
TPR.

The regulations prescribe the following as events in respect of
which a notice and accompanying statement must be given to TPR and
the trustees:

• The intended sale by the employer of a material proportion of
  its business or assets, in respect of which the main terms have
  been proposed.




• The intended granting or extending of a security by the
  employer over its assets which would result in the secured creditor
  being ranked above the scheme in the order of priority for debt
  recovery, in respect of which the main terms have been
  proposed.




• Where the employer is a company, the intended change of control
  of the employer, in respect of which the main terms have been
  proposed, or where a change of control occurs without a decision to
  do so having been taken, the change of control of the
  employer.

The regulations also set out the information to be included in
the accompanying statement.

The notifiable events regime and the declaration of intent
regime are separate and, where an event will give rise to
obligations under both regimes, both obligations must be complied
with.

The consultation closes on 27 October 2021.

For a more detailed discussion of the proposed changes, please
see our legal update.

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