1168.In order to comply with the funding provisions of Article 16(3) and, where appropriate, the investment provisions of Article 18(7) of the Directive, the home Member State may require a cross-border pension scheme to ‘ring-fence’ some or all of the assets or liabilities (or both) of the scheme. To this end, subsection (1) is a regulation-making power enabling the Regulator to direct the trustees or managers of a UK-based cross-border scheme to take, or refrain from taking, specified ring-fencing action. Subsection (2) provides that “ring-fencing” has the same meaning as in the Directive.
1169.Subsection (3) provides that failure to act in accordance with the directions in a ring-fencing notice issued by the Regulator may lead to the imposition of a civil penalty under section 10 of the Pensions Act 1995 (civil penalties).
Commentary on Sections UK occupational pension scheme receiving contributions from European employer Section 292: Power of Regulator to require ring-fencing of assets