Contribution notices (CNs)
Contribution notices (CNs)

The following Pensions guidance note provides comprehensive and up to date legal information covering:

  • Contribution notices (CNs)
  • The Pensions Regulator's moral hazard powers
  • What is a contribution notice?
  • Maximum liability under a contribution notice
  • In respect of which schemes can a contribution notice be issued?
  • Who can be issued with a contribution notice?
  • In what circumstances can the Pensions Regulator issue a contribution notice?
  • Reasonableness test
  • Acts, failures to act and the six-year look-back period
  • Main purpose test
  • more

FORTHCOMING DEVELOPMENT: On 11 February 2019 the DWP published its response to the consultation ‘Protecting Defined Benefit Pension Schemes—A Stronger Pensions Regulator’ which followed the government’s White Paper ‘Protection Defined Benefit Pension Schemes’ (19 March 2018). The response set out the measures to be adopted to strengthen the powers of the Pensions Regulator (TPR), including making changes to the Contribution Notice (CN) and Financial Support Direction (FSD) regimes. After a first failed attempt to legislate on these measures (through the Pension Schemes Bill 2019), the Pension Schemes Bill 2020 was reintroduced in Parliament on 7 January 2020. This 2020 Bill (which differs from its 2019 predecessor only in minor ways) aims to amend the Contribution Notice (CN) regime by (i) creating two new grounds on which CNs can be issued (the employer insolvency test and the employer resources test), (ii) adding relevant considerations to the reasonableness test set out in s 38(7) of the Pensions Act 2004, and (iii) changing the calculation date of the cap on the level of a CN so that it is close to the date of TPR’s final determination. Furthermore, the intention is for TPR to review its clearance guidance to clarify its expectations as to what employers and trustees should do. For more information on