Material detriment code revisited
Largely, in response to fears that the Pensions Regulator’s (TPR) anti-avoidance powers were not sufficient to tackle risks posed to members’ benefits by “new business models” and the like, the Pensions Act 2008 expanded TPR’s armoury. A significant addition was the power to impose contribution notices, in certain circumstances, where a party’s action or failure to act has a materially detrimental effect on the likelihood of members receiving their benefits (the “material detriment test”). As part of a number of safeguards on the use of this new power, TPR must produce a code of practice setting out the circumstances in which it expects to issue contribution notices on the basis of the material detriment test. This code was issued, in draft, for consultation in December 2008. On 5 May 2009, a response to the consultation was published together with a revised draft of the code.