Regulator publishes draft Code of Practice 12: Application of the Material Detriment Test for consultation
On 15 December the Pensions Regulator published its draft code of practice relating to the 'material detriment test', which will be used by the Regulator in relation to the exercise of its power to issue contribution notices. Prior to 14 April 2008, the Regulator only had the power to issue a contribution notice to a sponsoring employer of a scheme if that employer had, in the opinion of the Regulator, taken deliberate action to prevent the recovery of a section 75 debt or to prevent such a debt becoming due. Provisions contained within the Pensions Act 2008 will, in addition, allow the Regulator to issue a contribution notice where action taken by an employer has 'detrimentally affected in a material way the likelihood of accrued scheme benefits being received'. This new test, which will apply retrospectively to 14 April 2008, is thus not 'fault based', instead it focuses exclusively on the effect of action taken by an employer.
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