Risky business? Material detriment code published
Responding to the emergence of new business models which may “reduce the security provided by the pension scheme’s sponsoring employer”, the Pensions Act 2008 makes provision to enhance the Pensions Regulator’s anti-avoidance powers. The most significant change is the introduction of a power to impose contribution notices, based on a test of “material detriment”, under which the Regulator will look at whether a sponsor’s actions or failures to act have had a materially detrimental effect on the likelihood of members receiving their benefits. The Act provides a number of safeguards on the use of this new power, one of which is the requirement for the Regulator to set out, in a statutory code of practice, the circumstances in which it expects to use its power.