Financial support directions (FSDs)
Financial support directions (FSDs)

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

  • Financial support directions (FSDs)
  • The Pensions Regulator's moral hazard or anti-avoidance powers
  • What is a financial support direction (FSD)?
  • What constitutes financial support?
  • In respect of which schemes can a financial support direction be issued?
  • Who can be issued with a financial support direction?
  • In what circumstances can the Pensions Regulator issue a financial support direction?
  • Meaning of employer
  • Reasonableness test
  • Meaning of 'relevant time'—the two-year look-back period
  • 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 sets out the measures to be adopted to strengthen the powers of the Pensions Regulator (TPR). Among other things, the government announced plans to work with TPR and the PPF to amend the FSD process to a single-stage process, in which the Determinations Panel imposes a particular form/amount, of enforceable financial support on a target. Furthermore, the government will also change the name of the regime to Financial Support Notice (FSN). The scope of the regime will be extended to capture controlling shareholders of the sponsoring employer (who are individuals). The government will also pursue the proposal to broaden the targets of the FSD enforcement activity to ensure that pension obligations are met. The government also intends to replace the insufficiently resourced test with a new test which will be scheme-focused. The government will continue to work with TPR on the details of this test, which will be set out in secondary legislation. On the forms of financial support the target of the FSD is required to provide to the scheme, the