Enforceability of contribution notices and financial support directions overseas
Produced in partnership with Wyn Derbyshire of gunnercooke LLP
Enforceability of contribution notices and financial support directions overseas

The following Pensions practice note produced in partnership with Wyn Derbyshire of gunnercooke LLP provides comprehensive and up to date legal information covering:

  • Enforceability of contribution notices and financial support directions overseas
  • The Pension Regulator’s moral hazard powers
  • Using moral hazard powers against foreign entities
  • Enforcement of moral hazard powers in the EU or European Free Trade Association area
  • On and from IP completion day
  • Before IP completion day
  • Enforcement of moral hazard powers beyond the EU or EFTA

The Pension Regulator’s moral hazard powers

Among the various powers provided to the Pensions Regulator under the moral hazard legislation of the Pensions Act 2004 (PeA 2004) are the powers to issue contribution notices (CNs) and financial support directions (FSDs). Those powers are potentially wide-ranging and draconian.

In broad terms, a CN could be imposed on an employer of a defined benefit (DB) scheme and/or any connected or associated person if, for instance, there has been a deliberate attempt to evade responsibility for any s 75 debt or the likelihood of scheme members getting their benefits has materially worsened.

As regards FSDs, again these could be imposed on DB employers and/or associated or connected parties if the scheme employer is a service company or the scheme is deemed to be insufficiently resourced (as measured by a financial test laid down under the moral hazard legislation).

For more information on the Pensions Regulator's moral hazard powers, see Practice Note: The powers of the Pensions Regulator—Moral hazard powers.

For more information on CNs and FSDs, see Practice Notes: Contribution notices and Financial support directions.

Using moral hazard powers against foreign entities

There is no provision in the moral hazard legislation which prevents the Pensions Regulator from issuing CNs or FSDs against foreign entities. In fact, the Pensions Regulator has exercised its moral hazard powers in several instances involving overseas entities, including:

  1. Sea

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