Commentary on Sections European occupational pension scheme receiving contributions from UK employer Section 293: Functions of Regulator in relation to institutions administered in other Member States
1170.This section places certain duties on the Regulator where the UK is the host Member State – that is, where a non-UK based pension scheme is accepting contributions from a sponsoring employer located in the UK.
1171.Subsection (1) provides that where a UK employer is making, or plans to make, contributions to a European pensions institution, any function which Article 20 of the Directive requires or allows to be exercised by the competent authorities of the host member, is exercisable by the Regulator. Subsection (2) requires the Regulator, when it has been notified of the intention of a non-UK based pension scheme to accept contributions from a UK employer, to inform the regulatory authority of the host Member State within 2 months of receipt of the notice, of the relevant UK legal requirements under which the prospective cross-border pension scheme must operate.
1172.Subsection (3) places a duty on the Regulator to notify the competent authority of the home Member State, as soon as reasonably practicable, of any significant changes in UK relevant legal requirements.
1173.Subsection (4) places a duty on the Regulator to monitor the activities of a pension scheme located in another Member State that is accepting contributions from a UK employer, and to notify the regulatory authority for that scheme of any breaches detected of UK legal requirements.
1174.Subsections (5) to (7) enable the Regulator to take action against a UK employer where a non-UK based pension scheme accepting contributions from that UK employer has breached relevant UK legal requirements under which it is obliged to operate. These provisions implement the provisions of Article 20(10) of the Directive, which allow the Regulator to take steps to stop the pension scheme from operating in respect of a sponsoring employer where the regulatory authority of the Member State in which the pension scheme is based has been unable to stop the scheme from breaching the host Member State’s social and labour laws. Subsection (5) will enable the Regulator to issue a notice to a UK-based employer, requiring the employer to take (or refrain from taking) various steps, as specified in the notice, including directing the UK-based employer to cease to make further contributions to the pension scheme. Subsection(6) is regulation making power permitting further provision to be made about the effects of a notice ordering a UK employer to cease making further contributions to a European pensions institution. Subsection (7) enables the Regulator to impose a civil penalty under Section 10 of the Pensions Act 1995 for failure to comply with a notice issued under Subsection (5).
1175.Subsection (8) defines the terms ‘European pensions institution’, ‘UK employer’ and ‘relevant legal requirements’.