The draft Pensions Regulator (Notifiable Events) (Amendment) Regulations 2021, which were expected to enter into force on 6 April 2022, now seem likely to be delayed.
The Pension Schemes Act 2021, which partially entered into force on 1 October 2021, enables regulations to be made prescribing changes to the notifiable events regime. This includes the introduction of new events triggering the requirement to notify the Pensions Regulator (the Regulator), as well as setting out details on the 'accompanying statement' which will need also to be submitted in respect of certain events.
A consultation on the draft regulations was launched in September 2021 by the DWP and closed on 27 October 2021. Since that date, there has been no government response to the consultation and no finalised regulations published. Like others, we have tried to obtain clarity on the position but have not been able to do so.
Many commentators in the industry raised concerns in their responses to the consultation about difficulties interpreting certain provisions in the draft regulations. This included a lack of clarity around when precisely a 'decision in principle' would be reached, and therefore a notification to the Regulator would be necessary. Similarly, there was doubt about the point at which the 'main terms' of a transaction will be proposed, and uncertainty around what would constitute a 'material change' in those terms, prompting further updates to the Regulator.
It has been speculated that this uncertainty will provoke a very high volume of notifications to the Regulator, particularly during the initial period of the new regime's entry into force, and that this is likely to cause strain on the Regulator's resources.
Given the issues raised by the industry at the consultation stage, the Association of Consulting Actuaries called in October for 'comprehensive guidance' to be put in place before entry into force of the new notifiable events framework. It is perhaps consideration of all these questions that has led to the delay.
The intended entry into force date of 6 April is fast approaching, and a lack of update from the DWP is causing much stress for live transactions that may be caught by the new regime. Those involved in such transactions should continue to monitor the situation closely and be actively preparing for entry into force of the new regime. This includes assessing whether your transaction would fall into the scope of the proposed new notifiable events, considering at what stage(s) the Regulator would need to be notified and what information might have to be included in the 'accompanying statement'.
While there is no certainty on when the regulations might enter into force if they are indeed delayed, it is most common (although not always the case!) for pensions regulations to have an entry into force date in either April or October. We could therefore speculate that, if not in April, we might see the regulations may come into force in October 2022. Clearly, we will be continuing to watch this closely and will provide further updates.
If you have any questions about anything discussed in this blog, please contact a member of the pensions team.
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