What are my obligations as an employer should my company’s financial situation change?

If one or more of the following ‘employer-related’ events occurs, please notify The Pensions Regulator, copying in TPT Retirement Solutions, immediately.  

The Pensions Regulator requires that employers alert us immediately if either of the following employer-related events occurs:

(i)     Notifiable event – these are events which provide an early warning of possible insolvency. Some examples of a notifiable event are as follows:

• a)   Any decision to take action which will, or is intended to, result in a debt which is, or may become due, to the scheme not being paid in full.
• b)   A decision by the employer to cease to carry on business in the United Kingdom.
• c)   Advice is received by the employer that it is trading wrongfully within the meaning of section 214 of the Insolvency Act 1986(a), or that there is no reasonable prospect that the organisation will avoid insolvency.
• d)   Any breach of a covenant in an agreement with a bank or institution providing banking services, other than where it is agreed that the covenant will not be enforced. A decision by a controlling company (if applicable) to relinquish control of the employer company.
• e)   The conviction of any individual for an offence, involving dishonesty, if the offence was committed while an individual was a director or partner of the employer.

(ii) Type A event – These are transactions which are materially detrimental to a defined benefit pension scheme and its members. Some examples of a Type A event are as follows:

• Change in control
• Change in creditor priority
• Significant increase in debt
• Distribution to other stakeholders.

In addition, an employer is required to notify us in the event that it is unable (or anticipates being unable) to meet its ongoing obligations to the scheme, such as the payment of deficit recovery contributions.

Further guidance on Type A events is available from The Pensions Regulator.