Regulator updates code on late payment policing

The regulator is consulting on updated codes of practice to ensure members’ contributions are properly invested and is seeking to extend the late-payment threshold from 90 to 120 days.

Charles Counsell, executive director for employer compliance at the regulator, said the extra days would to help employers “who might actually be in some financial difficulty to get back on track”.

The regulator also recognises its limitations in policing all schemes and so its new code is placing responsibility on trustees, providers and employers to resolve any concerns over late or missing payments before 120 days have elapsed.

The consultation states: “The regulator does not consider its role to be to chase the missing contributions owed to schemes by employers. We are a risk-based regulator and our resources and powers are best used focusing our enforcement actions on the worst-offending employers, by which we mean those who are wilfully and deliberately not paying what is due.”

The code acknowledges there is not an express statutory duty on trustees to monitor payments, but that they do have a duty to report where payments are not received and are required to have internal controls to ensure this.

The code will go out for a 10-week consultation, which Counsell expects to be signed off by the secretary of state for work and pensions by the late spring or early summer.

The timing is designed to coincide with the staging dates of medium to small-sized employers, where there is a greater expectation of poor practice.