Pensions Act 2004

Commentary on Sections

Part 7 – Cross-Border Activities Within European Union

Summary

UK occupational pension scheme receiving contributions from European employer

Section 292: Power of Regulator to require ring-fencing of assets

1168.In order to comply with the funding provisions of Article 16(3) and, where appropriate, the investment provisions of Article 18(7) of the Directive, the home Member State may require a cross-border pension scheme to ‘ring-fence’ some or all of the assets or liabilities (or both) of the scheme. To this end, subsection (1) is a regulation-making power enabling the Regulator to direct the trustees or managers of a UK-based cross-border scheme to take, or refrain from taking, specified ring-fencing action. Subsection (2) provides that “ring-fencing” has the same meaning as in the Directive.

1169.Subsection (3) provides that failure to act in accordance with the directions in a ring-fencing notice issued by the Regulator may lead to the imposition of a civil penalty under section 10 of the Pensions Act 1995 (civil penalties).