As an employer, you are responsible for providing the trustees of your company pension scheme and their advisers with the information that they need to carry out their duties.
The Pensions Regulator is the UK regulator of all work-based pension schemes. Our aim is to provide you with support and guidance to carry out your role with confidence and to work with you if any problems arise.
The Pensions Regulator's main aim is to prevent problems from developing. Where possible, we will provide support and advice to employers, trustees, administrators and others where potential problems are identified.
The Pensions Act 2004 gives the Pensions Regulator a set of specific objectives:
- to protect the benefits of members of work-based pension schemes;
- to promote good administration of work-based pension schemes; and
- to reduce the risk of situations arising that may lead to claims for compensation from the Pension Protection Fund.
In order to meet these objectives, we concentrate our resources on schemes where we identify the greatest risk to the security of members' benefits.
We will also promote high standards of scheme administration, and work to ensure that those involved in running pension schemes have the necessary skills and knowledge.
In order to identify and reduce the risk to members' benefits, the Pensions Regulator requires a range of information about pension schemes and employers. If you provide a scheme, as an employer, you must:
- Provide us with any updates to your scheme, for instance a change in membership numbers;
- Complete a scheme return - this provides us with a wide range of information about schemes, including details of membership, sponsoring employers, trustees, advisers, administration, funding and investment.
- Ensure that trustees have sufficient information about your company to be able to provide up-to-date, accurate details to the regulator.
- Pay employees' contributions to the scheme within 19 days from the end of the month in which they were deducted from pay;
- Pay your own contributions in line with the schedule of contributions; and
- Advise us of any delays, for example with paying contributions.
If you fail to pay contributions as described above, and the failure is likely to be materially significant, the Pensions Regulator will expect to receive a report from the trustees or scheme managers.
As an employer, you will need to liaise with trustees in a number of areas. You may also want to take a look at our Guidance for Trustees as a useful explanation of the trustee role. And you can find out more about working with trustees in the Trustee Toolkit.
It is vital for trustees to have access to a basis of pensions knowledge as they must be able to demonstrate that they have the knowledge and understanding required to carry out their role effectively.
The Trustee Toolkit, at www.trusteetoolkit.com was developed for this purpose, providing a basic foundation, whilst also preparing for more complex issues such as pension law and scheme funding. It has been particularly developed for trustees of small schemes in mind, as they may not have access to other training.
The toolkit is a free of charge, non-compulsory e-learning consisting of 11 interactive modules which cover the whole of the guidance in the code. The programme uses scheme scenarios and case studies to guide the user through the modules, with each one ending in a small assessment.
Although designed for trustees, it can be completed by anyone who wishes to use it to improve their knowledge and gain an insight into the day-to-day running of a pension scheme.
Where scheme trustees are also your employees, you must give them sufficient paid time off during working hours to carry out their duties as trustees and undertake trustee training.
The Pensions Acts 1995 and 2004 provide the Pensions Regulator with a range of powers that enable us to meet our objectives. We will use these powers flexibly, reasonably and appropriately, with the aim of putting things right and keeping schemes on the right track for the long term.
Our powers fall into three broad categories:
- Investigating schemes: how we gather information to help us identify and monitor risks.
- Putting things right: what we can do where problems have been identified.
- Acting against avoidance: how we will ensure that employers do not sidestep their pension obligations.
The Pensions Regulator's codes of practice and guidance give practical guidelines on the requirements of pensions legislation. The codes set out the standards of conduct and practice expected of those involved in running and providing pension schemes. Those standards reflect how a well-run pension scheme would choose to meet the relevant requirements.
If you do not yet provide a pension scheme, check the stakeholder section of the Pensions Regulator's website to see if you are legally required to offer one to your employees. The online decision tree will help you decide if you have to offer a stakeholder pension to your staff. The Welfare Reform and Pensions Act 1999 requires employers to offer their relevant employees access to at least a stakeholder pension scheme, unless they are exempt.
Katherine Long works for the Pensions Regulator's communications team. For more information visit www.thepensionsregulator.gov.uk or contact our customer support team on 0870 606 3636
