Pensions Act 2004

Commentary on Sections

Part 1 – the Pensions Regulator

Financial support directions

Section 48: The sum specified in a section 47 contribution notice

186.This section defines the maximum contribution that the Regulator can require by reference to the debt under section 75 of the Pensions Act 1995 (deficiencies in the assets) which was due, or would have been due, at the time of non-compliance with the financial support direction.

187.Subsection (1) states that the Regulator can specify in the contribution notice the whole or part of the shortfall sum in relation to a scheme. Subsection (2) sets out how the amount of the shortfall sum should be calculated. Where, at the “time of non-compliance”, a debt was due from the employer under section 75 of the Pensions Act 1995, the shortfall sum is the amount which the Regulator estimates the debt to be at that time, or, if no such debt was due, the shortfall sum is the amount of the debt that the Regulator estimates would become due if subsection (2) of section 75 of the Pensions Act 1995 applied and the “time of non-compliance” were the time designated for the purposes of that subsection.

188.Subsection (3) sets out that the “time of non-compliance” is where-

• financial support for the scheme is not put in place within the period specified in the Regulator’s direction, the time immediately after the expiry of that period;

• a financial support arrangement lapses, the time when the financial support ceased to be in place;

• there is a failure to notify the Regulator of a prescribed event in respect of the financial support, the time when the prescribed event occurred; and

• more than one type of non-compliance applies, whichever of those times the Regulator determines.