Here's the Q&A from the recent Restructuring & Insolvency community webinar on Pension Issues for Insolvency Practitioners which took place on 12 September 2022.
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Is the requirement to complete a S120 notice limited to the insolvency event or does it need doing where there is a change in office holder appointed as well? I'm thinking after a block transfer appointing a new IP
The requirement to submit an s120 notice is restricted to an insolvency event. However, if the pension scheme is Defined Benefit (aka Final Salary) and going through Pension Protection Fund assessment post your insolvency appointment, then it would be prudent to advise the Pension Protection Fund at the very least of a change in IP.
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Am I right that a S122 is not required for NEST, Smart, Now pensions etc as it’s only defined benefit schemes?
As you wrote, s122 is only applicable to defined benefit (aka final salary) schemes. NEST, Smart Pensions, and Now Pensions are all Master Trust Defined Contribution Schemes set up for Auto Enrolment purposes and are never Defined Benefit.
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Re a contract based scheme: please confirm only a s120 to PPF and tPR and unpaid contributions check required?
Correct
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Are s22 notices needed for a follow on appt e.g. admin to CVL? Or just s120 notices?
Yes, it's to notify relevant parties of the insolvency appointment, and then for the incumbent IP to address the independence of the Trustees.
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Where there is a TUPE transfer but the sale purchase agreement doesn't state that unpaid pension contributions (or the right to claim them) will pass to the purchaser, presumably the IP can still, and indeed would have an obligation to submit forms RP15 / 15a to the RPS to claim them from the National Insurance Fund?
Correct
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Do NEST only offer trust based schemes?
Yes - it's a Master Trust Defined Contribution scheme set up by the Government for Employers to use for Auto Enrolment purposes
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What counts as an independent trustee for the purposes of section 22?
Thank you for this prize-worthy question, the answer to which is in s23 of the Pensions Act 1995 which says:
Requirement for independent trustee
(1)While section 22 applies in relation to a scheme, the practitioner or official receiver must—
(a)satisfy himself that at all times at least one of the trustees of the scheme is an independent person, and
(b)if at any time he is not so satisfied, appoint under this paragraph, or secure the appointment of, an independent person as a trustee of the scheme.
(2)The duty under subsection (1)(b) must be performed as soon as reasonably practicable and, if a period is prescribed for the purposes of that subsection, within that period.
(3)For the purposes of subsection (1) a person is independent only if—
(a)he has no interest in the assets of the employer or of the scheme, otherwise than as trustee of the scheme,
(b)he is neither connected with, nor an associate of—
(i)the employer,
(ii)any person for the time being acting as an insolvency practitioner in relation to the employer, or
(iii)the official receiver, acting in any of the capacities mentioned in section 22(1)(b) in relation to the employer, and
(c)he satisfies any prescribed requirements;
and any reference in this Part to an independent trustee shall be construed accordingly.
(4)Where, apart from this subsection, the duties imposed by subsection (1) in relation to a scheme would fall to be discharged at the same time by two or more persons acting in different capacities, those duties shall be discharged—
(a)if the employer is a company, by the person or persons acting as the company’s liquidator, provisional liquidator or administrator, or
(b)if the employer is an individual, by the person or persons acting as his trustee in bankruptcy or interim receiver of his property or as permanent or interim trustee in the sequestration of his estate.
(5)References in this section to an individual include, except where the context otherwise requires, references to a partnership and to any debtor within the meaning of the [1985 c. 66.] Bankruptcy (Scotland) Act 1985. -
Other than asking directors, who may not know, how can IPs find out what the auto-enrolment dates / staging dates are to make sure they satisfy the ongoing auto-enrolment and certificate obligations during an appointment?
The Pensions Regulator in Birmingham - e-mail address is customersupport@autoenrol.tpr.gov.uk
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