Pensions Act 2008

• Citation: 2008 c. 30
• Sections: 314

Section 1 Jobholders

(1) For the purposes of this Part a jobholder is a worker—

(a) who is working or ordinarily works in Great Britain under the worker's contract,

(b) who is aged at least 16 and under 75, and

(c) to whom qualifying earnings are payable by the employer in the relevant pay reference period (see sections 13 and 15).

(2) Where a jobholder has more than one employer, or a succession of employers, this Chapter applies separately in relation to each employment.

(3) Accordingly—

(a) references to the employer are references to the employer concerned;

(b) references to membership of a pension scheme are references to membership in relation to the employment concerned.

Section 2 Continuity of scheme membership

(1) If a jobholder is an active member of a qualifying scheme, the employer must not take any action, or make any omission, by which (without the jobholder ceasing to be employed by the employer)—

(a) the jobholder ceases to be an active member of the scheme, or

(b) the scheme ceases to be a qualifying scheme.

(2) Subsection (1) is not contravened if the jobholder remains an active member of another qualifying scheme.

(3) Subsection (1) is not contravened if by virtue of section 5 the jobholder becomes an active member of an automatic enrolment scheme with effect from—

(a) the day after the cessation referred to in paragraph (a) or (b) of subsection (1), or

(b) a day within the prescribed period (if a period is prescribed).

(4) Subsection (1) is not contravened if the action or omission is at the jobholder's request.

(5) In this Part as it applies in the case of any jobholder, references to a qualifying scheme are references to a pension scheme which is a qualifying scheme in relation to that jobholder (see section 16).

Section 3 Automatic enrolment

(1) This section applies to a jobholder—

(a) who is aged at least 22,

(b) who has not reached pensionable age, and

(c) to whom earnings of more than £10,000 are payable by the employer in the relevant pay reference period (see section 15).

(2) The employer must make prescribed arrangements by which the jobholder becomes an active member of an automatic enrolment scheme with effect from the automatic enrolment date.

(3) Subsection (2) does not apply if the jobholder was an active member of a qualifying scheme on the automatic enrolment date.

(4) Subsection (2) does not apply if, within the prescribed period before the automatic enrolment date, the jobholder ceased to be an active member of a qualifying scheme because of any action or omission by the jobholder.

(5) For the purposes of arrangements under subsection (2) regulations may require information to be provided to any person by the employer or—

(a) where the arrangements relate to an occupational pension scheme, the trustees or managers of the scheme;

(b) where the arrangements relate to a personal pension scheme, the provider of the scheme.

(6) For the purposes of arrangements made under subsection (2) in relation to a personal pension scheme, regulations may deem an agreement to exist (subject to section 8) between the jobholder and the provider of the scheme for the jobholder to be an active member of the scheme on terms and conditions determined in accordance with the regulations.

(6A) In this section “ earnings ” has the meaning given in section 13(3).

(6B) In the case of a pay reference period of less or more than 12 months, subsection (1) applies as if the amount in paragraph (c) were proportionately less or more.

(7) The automatic enrolment date, in relation to any person, is the first day on which this section applies to the person as a jobholder of the employer. This is subject to section 4.

(8) In this Part as it applies in the case of any jobholder, references to an automatic enrolment scheme are references to a pension scheme which is an automatic enrolment scheme in relation to that jobholder (see section 17).

Section 4 Postponement or disapplication of automatic enrolment

(1) Where—

(a) an employer (E) gives to a person employed by E on E's staging date (“the worker”) notice that E intends to defer automatic enrolment for the worker until a date specified in the notice (“the deferral date”), and

(b) any prescribed requirements in relation to the notice are met,

the worker's automatic enrolment date is the deferral date if on that date section 3 applies to the worker as a jobholder of E; if not, subsection (4) applies.

(2) Where—

(a) a person (“the worker”) begins to be employed by an employer (E) after E's staging date,

(b) E gives the worker notice that E intends to defer automatic enrolment until a date specified in the notice (“the deferral date”), and

(c) any prescribed requirements in relation to the notice are met,

the worker's automatic enrolment date is the deferral date if on that date section 3 applies to the worker as a jobholder of E; if not, subsection (4) applies.

(3) Where—

(a) a person (“the worker”) employed by an employer (E) becomes, after E's staging date, a jobholder to whom section 3 applies,

(b) E gives the worker notice that E intends to defer automatic enrolment until a date specified in the notice (“the deferral date”), and

(c) any prescribed requirements in relation to the notice are met,

the worker's automatic enrolment date is the deferral date if on that date section 3 applies to the worker as a jobholder of E; if not, subsection (4) applies.

(4) Where this subsection applies, section 3(2) does not apply in relation to any employment of the worker by E in the period beginning with the starting day and ending with the deferral date.

(5) A notice under this section may be given on or before the starting day or within a prescribed period after that day.

(6) The deferral date may be any date in the period of three months after the starting day.

(7) An employer who gives a worker a notice under subsection (1) or (2) may not give the worker a notice under subsection (3) in relation to any occasion on or before the deferral date specified in the notice on which the worker becomes a jobholder to whom section 3 applies.

(8) In this section—

“ staging date ”, in relation to an employer of a particular description, means the date prescribed under section 12 in relation to employers of that description;

“ starting day ” means—

E's staging date, in the case of a notice under subsection (1);

the day on which the worker begins to be employed by E, in the case of a notice under subsection (2);

the day on which the worker becomes a jobholder to whom section 3 applies, in the case of a notice under subsection (3).

Section 5 Automatic re-enrolment

(1) This section applies to a jobholder—

(a) who is aged at least 22,

(b) who has not reached pensionable age, and

(c) to whom earnings of more than £10,000 are payable by the employer in the relevant pay reference period (see section 15).

(1A) This section also applies to a jobholder who—

(a) is aged at least 22,

(b) has not reached pensionable age, and

(c) is not an active member of a qualifying scheme because there has been a period beginning at any time after the jobholder's automatic enrolment date during which the requirements of section 1(1)(a) or (c) were not met (so that the person was not a jobholder for that period).

(1B) This section also applies to a jobholder who has ceased to be an active member of a qualifying scheme because of something other than an action or omission by the jobholder.

(2) The employer must make prescribed arrangements by which the jobholder becomes an active member of an automatic enrolment scheme with effect from the automatic re-enrolment date.

(3) Subsection (2) does not apply if the jobholder was an active member of a qualifying scheme on the automatic re-enrolment date.

(3A) Subsection (2) does not apply if the jobholder's automatic enrolment date is deferred under section 4 from a date before the automatic re-enrolment date to a date after the automatic re-enrolment date.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) For the purposes of arrangements under subsection (2) regulations may require information to be provided to any person by the employer or—

(a) where the arrangements relate to an occupational pension scheme, the trustees or managers of the scheme;

(b) where the arrangements relate to a personal pension scheme, the provider of the scheme.

(7) For the purposes of arrangements made under subsection (2) in relation to a personal pension scheme, regulations may deem an agreement to exist (subject to section 8) between the jobholder and the provider of the scheme for the jobholder to be an active member of the scheme on terms and conditions determined in accordance with the regulations.

(7A) In this section “ earnings ” has the meaning given in section 13(3).

(7B) In the case of a pay reference period of less or more than 12 months, subsection (1) applies as if the amount in paragraph (c) were proportionately less or more.

(8) Automatic re-enrolment dates are dates . . . that are to be determined in accordance with regulations.

Section 6 Timing of automatic re-enrolment

(1) Regulations under section 5(8) must either—

(a) secure that for any jobholder there is no automatic re-enrolment date less than three years after the jobholder's automatic enrolment date, and that there is not more than one automatic re-enrolment date in any period of three years, or

(b) secure that for any employer there is not more than one automatic re-enrolment date in any period of 2 years and 9 months .

(2) Subsection (1) does not restrict the provision that regulations may make about the timing of a jobholder's automatic re-enrolment date (“ the relevant date ”) in the following cases.

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4) The first case is where—

(a) . . . the jobholder ceases to be an active member of a qualifying scheme . . . ,

(b) that event is not the effect of any action or omission by the jobholder . . . , and

(c) the relevant date is the jobholder's first automatic re-enrolment date after that event .

(5) The second case is where—

(a) there is a period beginning at any time after the jobholder's automatic enrolment date during which the requirements of section 1(1)(a) or (c) are not met (so that the person is not a jobholder for that period), and

(b) the relevant date is the jobholder's first automatic re-enrolment date after that period.

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 7 Jobholder's right to opt in

(1) This section applies to a jobholder who is not an active member of a qualifying scheme.

(2) But it does not apply at a time when—

(a) arrangements are required to be made under section 3 or 5 in respect of the jobholder, . . .

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The jobholder may by notice require the employer to arrange for the jobholder to become an active member of an automatic enrolment scheme.

(4) The Secretary of State may by regulations make provision—

(a) about the form and content of the notice;

(b) about the arrangements that the employer is required to make;

(c) for determining the date with effect from which the jobholder is to become an active member under the arrangements.

(5) For the purposes of arrangements under subsection (3) regulations may require information to be provided to any person by the employer or—

(a) where the arrangements relate to an occupational pension scheme, the trustees or managers of the scheme;

(b) where the arrangements relate to a personal pension scheme, the provider of the scheme.

(6) For the purposes of arrangements made under subsection (3) in relation to a personal pension scheme, regulations may deem an agreement to exist (subject to section 8) between the jobholder and the provider of the scheme for the jobholder to be an active member of the scheme on terms and conditions determined in accordance with the regulations.

(7) Subsections (8) and (9) apply where a jobholder becomes an active member of an automatic enrolment scheme in pursuance of a notice under this section and, within the period of 12 months beginning with the day on which that notice was given—

(a) ceases to be an active member of that scheme, and

(b) gives the employer a further notice under this section.

(8) The further notice does not have effect to require the employer to arrange for the jobholder to become an active member of an automatic enrolment scheme.

(9) But any arrangements the employer makes for the jobholder to become, within that period, an active member of such a scheme must be made in accordance with regulations under this section.

Section 8 Jobholder's right to opt out

(1) This section applies on any occasion when arrangements under section 3(2), 5(2) or 7(3) apply to a jobholder (arrangements for the jobholder to become an active member of an automatic enrolment scheme).

(2) If the jobholder gives notice under this section—

(a) the jobholder is to be treated for all purposes as not having become an active member of the scheme on that occasion;

(b) any contributions paid by the jobholder, or by the employer on behalf or in respect of the jobholder, on the basis that the jobholder has become an active member of the scheme on that occasion must be refunded in accordance with prescribed requirements.

(3) Regulations under subsection (2)(b) may, in particular, make provision about—

(a) the time within which contributions must be refunded;

(b) how the amount to be refunded is calculated;

(c) the procedure for refunding contributions.

(4) The Secretary of State may by regulations make further provision in relation to notices under this section.

(5) The regulations may in particular make provision—

(a) as to the form and content of a notice;

(b) as to the period within which a notice must be given;

(c) as to the person to whom a notice must be given;

(d) requiring any person to make prescribed arrangements for enabling notices to be given;

(e) requiring any person to take prescribed action in consequence of a notice (in addition to any action prescribed under subsection (2)(b)).

(6) The regulations must provide for the notice—

(a) to include information about the effect in relation to jobholders of giving notice under this section, and

(b) to be signed or otherwise authorised by the jobholder.

Section 9 Workers without qualifying earnings

(1) This section applies to a worker—

(a) to whom paragraphs (a) and (b) of section 1(1) apply (working in Great Britain and aged between 16 and 75),

(b) to whom paragraph (c) of section 1(1) does not apply (qualifying earnings), and

(c) who is not an active member of a pension scheme that satisfies the requirements of this section.

(2) The worker may by notice require the employer to arrange for the worker to become an active member of a pension scheme that satisfies the requirements of this section.

(3) The Secretary of State may by regulations make provision—

(a) about the form and content of the notice;

(b) about the arrangements that the employer is required to make;

(c) for determining the date with effect from which the worker is (subject to compliance with any requirements of the scheme) to become an active member under the arrangements.

(4) Subsections (5) and (6) apply where a worker becomes an active member of a pension scheme in pursuance of a notice under this section and, within the period of 12 months beginning with the day on which that notice was given—

(a) ceases to be an active member of that scheme because of any action or omission by the worker, and

(b) gives the employer a further notice under this section.

(5) The further notice does not have effect to require the employer to arrange for the worker to become an active member of a pension scheme.

(6) But any arrangements the employer makes for the worker to become, within that period, an active member of a pension scheme that satisfies the requirements of this section must be made in accordance with regulations under this section.

(7) A pension scheme satisfies the requirements of this section if—

(a) it is registered under Chapter 2 of Part 4 of the Finance Act 2004 (c. 12), and

(b) in the case of a personal pension scheme, there are, in relation to the worker concerned, direct payment arrangements (within the meaning of section 111A of the Pension Schemes Act 1993 (c. 48)) between the worker and the employer.

Section 10 Information to be given to workers

(1) The Secretary of State may make provision by regulations—

(a) for ... jobholders to be given information about the effect of sections 2 to 8 in relation to them;

(b) for ... workers to whom section 9 applies to be given information about the effect of that section in relation to them;

(c) for a prescribed person to be required to provide the information.

(2) Regulations under this section may in particular make provision about —

(a) what information must be given;

(b) in what circumstances it must be given;

(c) how and when it must be given.

Section 11 Information to be given to the Pensions Regulator

(1) The Secretary of State may make regulations requiring employers to provide the Pensions Regulator (“the Regulator”) with information about action they have taken or intend to take for the purposes of any provision of, or of regulations under, sections 2 to 10.

(2) The regulations may in particular—

(a) require an employer to provide information about pension schemes to which any action relates;

(b) require an employer to identify which of any prescribed descriptions a scheme falls within;

(c) require an employer to provide information that appears to the Secretary of State to be required for the performance by the Regulator of its functions under Chapter 2 of this Part;

(d) make provision about how and in what form any information is to be provided.

Section 12 Introduction of employers' duties

The Secretary of State may by regulations provide that sections 2 to 9 do not apply in the case of an employer of any description until such date after the commencement of those sections as is prescribed in relation to employers of that description.

Section 13 Qualifying earnings

(1) A person's qualifying earnings in a pay reference period of 12 months are the part (if any) of the gross earnings payable to that person in that period that is—

(a) more than £6,240 , and

(b) not more than £50,270 .

(2) In the case of a pay reference period of less or more than 12 months, subsection (1) applies as if the amounts in paragraphs (a) and (b) were proportionately less or more.

(3) In this section, “ earnings ”, in relation to a person, means sums of any of the following descriptions that are payable to the person in connection with the person's employment—

(a) salary, wages, commission, bonuses and overtime;

(b) statutory sick pay under Part 11 of the Social Security Contributions and Benefits Act 1992 (c. 4);

(c) statutory maternity pay under Part 12 of that Act;

(d) statutory paternity pay under Part 12ZA of that Act;

(e) statutory adoption pay under Part 12ZB of that Act;

(ea) statutory shared parental pay under Part 12ZC of that Act;

(eb) statutory parental bereavement pay under Part 12ZD of that Act;

(ec) statutory neonatal care pay under Part 12ZE of that Act;

(f) sums prescribed for the purposes of this section.

Section 14 Review of earnings trigger and qualifying earnings band

(1) The Secretary of State must in each tax year consider whether any of the amounts in sections 3(1)(c), 5(1)(c) and 13(1)(a) and (b) should be increased or decreased.

(2) If the Secretary of State considers that any of those amounts should be increased or decreased, the Secretary of State may make an order substituting in the provisions in question the amounts that the Secretary of State thinks appropriate.

(3) For the purposes of subsection (1) the Secretary of State may take into account any of the factors specified in subsection (4) (as well as any others that the Secretary of State thinks relevant).

(4) The factors are—

(a) the amounts for the time being specified in Chapter 2 of Part 3 (personal allowances) of the Income Tax Act 2007;

(b) the amounts for the time being specified in regulations under section 5 of the Social Security Contributions and Benefits Act 1992 (earnings limits and thresholds for Class 1 national insurance contributions);

(c) the amounts for the time being specified in section 44(4) of that Act (rate of basic state pension) and in regulations under section 3(1) of the Pensions Act 2014 (full rate of state pension);

(d) the general level of prices in Great Britain, and the general level of earnings there, estimated in such manner as the Secretary of State thinks fit.

Section 15 Pay reference period

(1) In relation to any person a pay reference period is the period prescribed.

(2) The Secretary of State may by regulations—

(a) make provision for determining a person's earnings in any pay reference period;

(b) make provision for determining the first date of each pay reference period in relation to a person.

(3) A reference in any provision to the relevant pay reference period is a reference to the period determined in accordance with regulations under this section, as they apply for the purposes of that provision in the case concerned.

Section 15A Power to specify rounded figures

(1) The Secretary of State may by order specify rounded figures for the purposes of section 3(6B), 5(7B) or 13(2) in the case of pay reference periods of any length specified in the order.

(2) A rounded figure so specified applies in place of the amount that would otherwise apply (“the exact amount”).

(3) The Secretary of State must decide in relation to any particular amount whether to specify—

(a) a figure that is a whole number of pounds, or

(b) a figure that is divisible by 10 pence, or

(c) a figure that includes a whole number of pennies.

(4) It is for the Secretary of State to decide whether to round any particular amount up or down.

Accordingly, a figure specified under this section may be the figure within paragraph (a) or (b) or (c) of subsection (3) that is closest to the exact amount or the one that is next closest to it (or, if two figures are joint closest, it may be either of those).

Section 16 Qualifying schemes

(1) A pension scheme is a qualifying scheme in relation to a jobholder (J) if—

(a) the scheme is an occupational pension scheme or a personal pension scheme,

(b) the scheme is registered under Chapter 2 of Part 4 of the Finance Act 2004 (c. 12), and

(c) while J is an active member, the scheme satisfies the quality requirement in relation to J.

(2) The Secretary of State may by regulations provide that subsection (1)(b) does not apply in relation to a scheme to which section 25 or 27 applies, if prescribed requirements are satisfied.

(3) The Secretary of State may by regulations provide that a scheme is not a qualifying scheme in relation to J if—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(aa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ab) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) while J is an active member, the contributions that must be paid to the scheme by, or on behalf or in respect of, J exceed a prescribed amount, or

(c) the scheme provides for average salary benefits to be provided to or in respect of J and contains prescribed features.

(3A) See also paragraphs 1(4) and 2(4) of Schedule 18 to the Pensions Act 2014, which confer power to make regulations providing for a scheme not to be a qualifying scheme in relation to a jobholder in certain circumstances.

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 17 Automatic enrolment schemes

(1) A pension scheme is an automatic enrolment scheme in relation to a jobholder (J) if—

(a) it is a qualifying scheme in relation to J,

(b) it satisfies the conditions in subsection (2), and

(c) it satisfies any further conditions prescribed.

(2) The conditions mentioned in subsection (1)(b) are that—

(a) no provision of the scheme prevents the employer from making arrangements prescribed by regulations under section 3(2), 5(2) or 7(4) for J to become an active member of the scheme;

(b) no provision of the scheme requires J to express a choice in relation to any matter, or to provide any information, in order to remain an active member.

Section 18 Occupational pension schemes

For the purposes of this Part, each of these is an occupational pension scheme—

(a) an occupational pension scheme within the meaning of section 1(1) of the Pension Schemes Act 1993 (c. 48) that has its main administration in the United Kingdom;

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) a pension scheme that is prescribed or is of a prescribed description and that has its main administration elsewhere than in the United Kingdom .

Section 19 Personal pension schemes

For the purposes of this Part, a personal pension scheme is a pension scheme that is not an occupational pension scheme.

Section 20 Quality requirement: UK money purchase schemes

(1) A money purchase scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if under the scheme—

(a) the jobholder's employer must pay contributions in respect of the jobholder;

(b) the employer's contribution, however calculated, must be equal to or more than 3% of the amount of the jobholder's qualifying earnings in the relevant pay reference period;

(c) the total amount of contributions paid by the jobholder and the employer, however calculated, must be equal to or more than 8% of the amount of the jobholder's qualifying earnings in the relevant pay reference period.

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) A scheme does not fail to satisfy the quality requirement under this section merely because the trustees or managers of the scheme may on any occasion refuse to accept a contribution below an amount prescribed for the purposes of this section on the grounds that it is below that amount.

Section 21 Quality requirement: UK defined benefits schemes

A defined benefits scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if it satisfies the test scheme standard in relation to that jobholder.

Section 22 Test scheme standard

(1) A scheme satisfies the test scheme standard in relation to a jobholder (J) if the pensions to be provided for the relevant members of the scheme are broadly equivalent to, or better than, the pensions which would be provided for them under a test scheme.

(2) Subject to subsection (3), the relevant members are J and all active members who are jobholders of the same employer as J.

(3) In applying this section the pensions to be provided for relevant members must be considered as a whole.

(4) The Secretary of State may by regulations make provision for the manner of, and criteria for, determining whether the pensions to be provided for the relevant members under a scheme are broadly equivalent to, or better than, the pensions which would be provided for them under a test scheme.

(5) Regulations under subsection (4) may provide for the determination to be made in accordance with guidance issued from time to time by the Secretary of State.

(6) The Secretary of State may by regulations provide that a scheme only satisfies the test scheme standard if the scheme actuary certifies that it does.

(7) Except in prescribed circumstances, the scheme actuary is the actuary appointed under section 47(1)(b) of the Pensions Act 1995 (c. 26) (professional advisers) in relation to the scheme.

(8) In the case of a scheme under which a sum of money is made available for the provision of benefits to a relevant member, references in this section to pensions are to be read as references to such sums.

Section 23 Test scheme

(1) A test scheme is an occupational pension scheme which satisfies—

(a) the requirement in subsection (2),

(b) the requirement in subsection (4) or requirements prescribed under subsection (6) (as appropriate), and

(c) any further requirements that are prescribed.

(2) The scheme must either—

(a) provide for a member to be entitled to a pension commencing at the appropriate age and continuing for life, or

(b) provide for a sum of money to be made available for the provision of benefits to a member commencing at the appropriate age and continuing for life.

(3) The appropriate age is 65 or any higher age prescribed.

(4) In the case of a scheme that provides entitlement to a pension as mentioned in subsection (2)(a), the annual rate of the pension at the appropriate age must be—

(a) 1/120th of average qualifying earnings in the last three tax years preceding the end of pensionable service,

multiplied by

(b) the number of years of pensionable service, up to a maximum of 40.

(5) Section 13(1) (qualifying earnings) applies for the purposes of subsection (4) as if the reference to a pay reference period were a reference to a tax year.

(6) In the case of a scheme that provides for a sum of money to be made available as mentioned in subsection (2)(b), regulations must prescribe requirements relating to that sum.

Section 23A Alternative quality requirements for UK defined benefits schemes

(1) The Secretary of State may by regulations provide that a defined benefits scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if any one or more of the following is satisfied—

(a) the scheme is of a prescribed description and satisfies the quality requirement under section 20 in relation to that jobholder;

(b) the cost of providing the benefits accruing for or in respect of the relevant members over a relevant period would require contributions to be made of a total amount equal to at least a prescribed percentage of the members' total relevant earnings over that period;

(c) in the case of each of at least 90% of the relevant members, the cost of providing the benefits accruing for or in respect of the member over a relevant period would require contributions to be made of a total amount equal to at least a prescribed percentage of the member's total relevant earnings over that period.

(2) For this purpose—

“ contributions ” means contributions to the scheme by, or on behalf or in respect of, a relevant member;

“ relevant earnings ” means earnings of a prescribed description;

“ relevant members ” means members of the scheme of a prescribed description;

“ relevant period ” means a period specified in or determined in accordance with the regulations.

(3) A percentage prescribed under subsection (1)(b) or (c) must be at least 8%.

(4) Regulations under subsection (1)(b) or (c) may make provision—

(a) about how to calculate whether the requirement is satisfied, including provision requiring the calculation to be made in accordance with prescribed methods or assumptions;

(b) requiring benefits of a prescribed description to be disregarded in determining whether the requirement is satisfied;

(c) that a scheme only satisfies the requirement if the scheme actuary certifies that it does; and for this purpose “scheme actuary” has the prescribed meaning.

(5) Section 13(3) (meaning of “earnings”) applies for the purposes of this section as it applies for the purposes of that section.

(6) The Secretary of State must from time to time review any regulations in force under subsection (1).

(7) A review must be carried out—

(a) during 2017, and

(b) after that, no more than three years after the completion of the previous review.

Section 24 Quality requirement: UK hybrid schemes

(1) A hybrid scheme that has its main administration in the United Kingdom satisfies the quality requirement in relation to a jobholder if it satisfies the requirements mentioned in whichever of these is the appropriate paragraph—

(a) the requirements for a money purchase scheme under section 20, subject to any prescribed modifications;

(b) the requirements for a defined benefits scheme under sections 21 to 23A , subject to any prescribed modifications.

(2) Which paragraph of subsection (1) is appropriate for any hybrid scheme is to be determined by rules made by the Secretary of State.

(3) The rules may provide for different paragraphs to be appropriate for different provisions of a scheme.

(4) The rules may provide for the paragraphs to be appropriate as alternatives, for any scheme or any provisions of a scheme.

Section 25 Quality requirement: non-UK occupational pension schemes

The Secretary of State may by regulations make provision as to the quality requirement to be satisfied in the case of an occupational pension scheme within section 18(b) or (c).

Section 26 Quality requirement: UK personal pension schemes

(1) This section applies to a personal pension scheme if the operation of the scheme—

(a) is carried on in such a way as to be a regulated activity for the purposes of the Financial Services and Markets Act 2000 (c. 8), and

(b) is carried on in the United Kingdom by a person who is in relation to that activity an authorised person or an exempt person under section 19 of that Act.

(2) The scheme satisfies the quality requirement in relation to a jobholder if the following conditions are satisfied.

(3) The first condition is that all of the benefits that may be provided to the jobholder under the scheme are money purchase benefits.

(4) The second condition is that, in relation to the jobholder, there is an agreement between the provider of the scheme and the employer under which—

(a) the employer must pay contributions in respect of the jobholder;

(b) the employer's contribution, however calculated, must be equal to or more than 3% of the amount of the jobholder's qualifying earnings in the relevant pay reference period.

(5) In subsection (6), “ shortfall ” means the difference (if any) between—

(a) the employer's contribution in respect of the jobholder under the agreement referred to in subsection (4), and

(b) 8% of the amount of the jobholder's qualifying earnings in the relevant pay reference period.

(6) The third condition is that if there is a shortfall there is an agreement between the provider of the scheme and the jobholder under which the jobholder must pay contributions which, however calculated, are equal to or more than the shortfall.

(7) The fourth condition is that, in relation to the jobholder, there are direct payment arrangements (within the meaning of section 111A of the Pension Schemes Act 1993 (c. 48)) between the jobholder and the employer.

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) A scheme does not fail to satisfy the quality requirement under this section merely because the provider of the scheme may on any occasion refuse to accept a contribution below an amount prescribed for the purposes of this section on the grounds that it is below that amount.

Section 27 Quality requirement: other personal pension schemes

The Secretary of State may by regulations make provision as to the quality requirement to be satisfied in the case of a personal pension scheme to which section 26 does not apply.

Section 28 Certification that quality requirement or alternative requirement is satisfied

(1) The Secretary of State may by regulations provide that, subject to provision within subsection (6)(f), a scheme to which this section applies is to be taken to satisfy the relevant quality requirement in relation to each of an employer's relevant jobholders if a certificate given in accordance with the regulations is in force in relation to the employer.

(1A) In this section—

(a) “ relevant jobholder ” means a jobholder to whom the certificate in question applies;

(b) a reference to a scheme includes a reference to part of a scheme.

(2) The certificate must state—

(a) that , in relation to relevant jobholders of the employer who are active members of the scheme, the scheme is in the opinion of the person giving the certificate able to satisfy the relevant quality requirement throughout the certification period , or

(b) that, in relation to those jobholders, the scheme is in that person's opinion able to satisfy a prescribed alternative requirement throughout the certification period.

(2A) Alternative requirements must be such that, assuming all jobholders to be active members of schemes to which this section applies, for at least 90% of jobholders—

(a) employer contributions, and

(b) total contributions,

would be likely to be no less if every scheme satisfied an alternative requirement applicable to it than if every scheme satisfied the relevant quality requirement.

(2B) In subsection (2A)—

“ alternative requirement ” means a requirement prescribed under subsection (2)(b);

“ employer contributions ”, in relation to an active member of a scheme, means the amount of contributions that have to be paid under the scheme in respect of the member by the employer;

“ total contributions ”, in relation to an active member of a scheme, means the total amount of contributions that have to be paid under the scheme in respect of the member by the employer and by the member.

(2C) The Secretary of State—

(a) must apply the test in subsection (2A) when regulations under subsection (2)(b) are first made, and

(b) must carry out subsequent reviews of whether the test continues to be satisfied.

A review under paragraph (b) must be carried out during 2017, and after that each review must be completed no more than three years after the completion of the previous one.

(3) This section applies to—

(a) a money purchase scheme to which section 20 applies;

(b) a personal pension scheme to which section 26 applies;

(c) a hybrid scheme, to the extent that requirements within section 24(1)(a) apply.

(3A) This section also applies to—

(a) a money purchase scheme that is an occupational pension scheme within section 18(b);

(b) a personal pension scheme of a prescribed description for which provision is made under section 27;

(c) a hybrid scheme that is an occupational pension scheme within section 18(b), to the extent prescribed.

(3B) This section also applies to a defined benefits scheme that has its main administration in the United Kingdom and is of a description prescribed under section 23A(1)(a).

(4) The “relevant quality requirement”—

(a) for a scheme within subsection (3)(a), means the quality requirement under section 20;

(b) for a scheme within subsection (3)(b), means the quality requirement under section 26;

(c) for a scheme within paragraph (c) of subsection (3), means the requirements mentioned in that paragraph;

(d) for a scheme within subsection (3A), means a prescribed requirement.

(e) for a scheme within subsection (3B), means the quality requirement under section 23A(1)(a).

(5) Regulations may make further provision in relation to certification under this section.

(6) Regulations may in particular make provision—

(a) as to the period for which a certificate is in force (the “certification period”);

(b) as to the persons by whom a certificate may be given;

(c) as to procedures in connection with certification or where a certificate has been given;

(d) requiring persons to have regard to guidance issued by the Secretary of State;

(e) requiring an employer to calculate the amount of contributions that a scheme, and any contribution agreements , required to be paid by or in respect of any relevant jobholder in the certification period;

(f) as to cases where the requirements of a scheme, and any contribution agreements , as to payment of contributions by or in respect of relevant jobholders of an employer did not satisfy prescribed conditions.

(7) Provision within subsection (6)(f) includes in particular provision for a scheme not to be treated by virtue of regulations under this section as having satisfied the relevant quality requirement unless prescribed steps are taken (which may include the making of prescribed payments).

(8) In subsection (6) “ contribution agreements ” means—

(a) the agreement required, in the case of a scheme within subsection (3)(b), by section 26(4) and any agreement required, in the case of such a scheme, by section 26(6) , or

(b) any agreement of the same or a similar kind that is required, in the case of a scheme within subsection (3A)(b), by regulations under section 27.

(9) The Secretary of State may by order repeal this section.

Section 29 Transitional periods for money purchase and personal pension schemes

(1) During the first transitional period ...—

(a) sections 20(1)(b) and 26(4)(b) have effect as if for “3%” there were substituted “ 1% ” ;

(b) sections 20(1)(c) and 26(5)(b) have effect as if for “8%” there were substituted “ 2% ” .

(2) The first transitional period is a prescribed period of at least one year, beginning with the coming into force of section 20.

(3) During the second transitional period ...—

(a) sections 20(1)(b) and 26(4)(b) have effect as if for “3%” there were substituted “ 2% ” ;

(b) sections 20(1)(c) and 26(5)(b) have effect as if for “8%” there were substituted “ 5% ” .

(4) The second transitional period is a prescribed period of at least one year, beginning with the end of the first transitional period.

Section 30 Transitional period for defined benefits and hybrid schemes

(1) Subsection (3) applies if, in relation to a person who on the employer's first enrolment date is a jobholder to whom section 3 applies, the conditions in subsection (2) are satisfied, and continue to be satisfied during the transitional period for defined benefits and hybrid schemes.

(2) The conditions are that—

(a) the jobholder has been employed by the employer for a continuous period beginning before the employer's first enrolment date,

(b) at a time in that period before the employer's first enrolment date, the jobholder became entitled to become an active member of a defined benefits scheme or a defined benefits member of a hybrid scheme ,

(c) the jobholder is, and has always since that time been, entitled to become an active member of a defined benefits scheme or a defined benefits member of a hybrid scheme , and

(d) the scheme to which that entitlement relates is a qualifying scheme, and any scheme to which it has related on or after the employer's first enrolment date has been a qualifying scheme.

(3) If by the end of the prescribed period the employer has given the jobholder notice that the employer intends to defer automatic enrolment until the end of the transitional period for defined benefits and hybrid schemes , section 3 has effect in relation to the jobholder with the substitution for subsection (2) of the following subsection—

(2) The employer must make prescribed arrangements by which the jobholder becomes

(a) an active member, with effect from the end of the transitional period for defined benefits and hybrid schemes, of an automatic enrolment scheme which is a defined benefits scheme, or

(b) a defined benefits member, with effect from the end of that period, of an automatic enrolment scheme which is a hybrid scheme. A reference in this subsection to a scheme does not include a scheme to which section 30(11)(a) or (b) applies.

(4) If a notice is given under subsection (3) and at any later time in the transitional period for defined benefits and hybrid schemes the condition in subsection (2)(c) or (d) of this section ceases to be satisfied, subsection (5) applies instead of subsection (3) (and the day after the last day on which that condition is satisfied is referred to as “ the closure date ”).

(5) Where this subsection applies, section 3 has effect in relation to the jobholder with the substitution for subsection (2) of the following subsection—

(2) The employer must make prescribed arrangements by which the jobholder either—

(a) becomes an active member, with effect from the closure date, of an automatic enrolment scheme which is a defined benefits scheme other than a scheme to which section 30(11)(a) applies ,

(aa) becomes a defined benefits member, with effect from the closure date, of an automatic enrolment scheme which is a hybrid scheme, other than a scheme to which section 30(11)(b) applies

(b) becomes an active member, with effect from the automatic enrolment date, of an automatic enrolment scheme which is a money purchase scheme or personal pension scheme .

(c) becomes a money purchase member, with effect from the automatic enrolment date, of an automatic enrolment scheme which is a hybrid scheme,

(d) becomes an active member, with effect from the automatic enrolment date, of an automatic enrolment scheme which is a defined benefits scheme to which section 30(11)(a) applies, or

(e) becomes a defined benefits member , with effect from the automatic enrolment date, of an automatic enrolment scheme which is a hybrid scheme to which section 30(11)(b) applies.

(6) If the jobholder becomes a member of a scheme under arrangements made under subsection (2)(b) of that section (as substituted by subsection (5))—

(a) the employer's contributions are payable with effect from the automatic enrolment date;

(b) any requirement of the scheme . . . for contributions to be payable by the jobholder does not apply in respect of the period of the jobholder's membership before the closure date;

(c) regulations made for the purposes of section 3(2)(b) must secure that the jobholder may pay, within a period prescribed by the regulations, any contributions which would have been payable by the jobholder but for paragraph (b) of this subsection.

(7) Where subsection (3) or (5) of this section applies—

(a) section 3(3) and (4) apply as if references to the automatic enrolment date were references to the day with effect from which arrangements would by virtue of this section fall to be made in respect of the jobholder;

(b) section 4 applies as if—

(i) the reference in subsection (1) to the employer's staging date were a reference to the employer's first enrolment date;

(ii) in that subsection, for “the workers's automatic enrolment date is the deferral date” there were substituted the day with effect from which arrangements fall to be made by virtue of section 30 in respect of the jobholder is changed to the deferral date;

(iii) in subsections (4) to (6), references to the starting day were references to the day with effect from which arrangements would by virtue of this section fall to be made in respect of the jobholder.

(c) section 5(2) does not apply in relation to an automatic re-enrolment date that falls before the day with effect from which arrangements would by virtue of this section fall to be made in respect of the jobholder.

(7A) The Secretary of State may by regulations make provision about the form and content of a notice under subsection (3).

(8) The transitional period for defined benefits and hybrid schemes is a prescribed period beginning with the day on which section 3 comes into force.

(9) In this section, the “ employer's first enrolment date ” means the first day on which section 3 applies in the case of the employer (where that day falls within the transitional period for defined benefits and hybrid schemes).

(10) For the purposes of this section—

(a) a person is a “money purchase member” of a hybrid scheme if—

(i) the person is an active member of the scheme, and

(ii) all the benefits accruing in respect of his or her membership are money purchase benefits, and

(b) a person is a “defined benefits member” of a hybrid scheme if the person is an active member of the scheme other than a money purchase member.

(11) In subsection (2) references to a scheme do not include—

(a) a defined benefits scheme that satisfies the quality requirement in relation to the jobholder by reason only of section 23A(1)(a), or

(b) a hybrid scheme if—

(i) the appropriate paragraph of section 24(1) for any provisions of the scheme is paragraph (b) (those provisions are referred to below as “ the defined benefits section ”),

(ii) the defined benefits section satisfies section 23A(1)(a) as applied by section 24(1)(b), and

(iii) the defined benefits section does not satisfy any of the other requirements mentioned in section 24(1)(b).

Section 31 Effect of freezing order , assessment period or pause order

(1) Where a jobholder is an active member of a qualifying scheme and a freezing event occurs in relation to the scheme, the jobholder does not, for the purposes of this Chapter, cease to be an active member of the scheme, and the scheme does not, for those purposes, cease to be a qualifying scheme, by virtue of any relevant provision.

(2) Where a worker is an active member of a scheme that satisfies the requirements of section 9 and a freezing event occurs in relation to the scheme, the worker does not, for the purposes of section 9(1)(c), cease to be an active member of the scheme by virtue of any relevant provision.

(3) In this section—

“ freezing event ” in relation to a scheme means—

the making of a freezing order under section 23 of the Pensions Act 2004 (c. 35) in relation to the scheme, ...

the beginning of an assessment period within the meaning of section 132 of that Act in relation to the scheme, ...

the making of a pause order under section 31 of the Pension Schemes Act 2017 , or

the making of a pause order under section 44 of the Pension Schemes Act 2021;

“ relevant provision ” means—

in relation to a freezing order, provision contained in the order, or the provision made with respect to the order by section 23 of the Pensions Act 2004;

in relation to an assessment period, the provision made with respect to the period by section 133 of that Act.

in relation to a pause order, provision contained in the order or the provision made with respect to the order by section 31 of the Pension Schemes Act 2017 or (as the case may be) section 44 of the Pension Schemes Act 2021 .

Section 32 Power of trustees or managers to modify by resolution

(1) The trustees or managers of an occupational pension scheme may by resolution modify the scheme—

(a) with a view to enabling the scheme to comply with the conditions in section 17(2), or

(b) by increasing the amount required to be paid in contributions, in order for the scheme to satisfy—

(i) the requirements contained in section 20(1),

(ii) those requirements as modified under section 24(1)(a), or

(iii) a requirement prescribed under section 28(2)(b).

(2) An increase under subsection (1)(b) may be made only—

(a) by increasing the amount of any contribution, directly or by modifying the basis on which it is calculated, or

(b) by increasing the frequency of any contributions.

(3) No modification may be made by virtue of subsection (1) without the consent of the employer in relation to the scheme.

(4) In the application of subsection (3) to a scheme in relation to which there is more than one employer, references to the employer have effect as if they were references to a person nominated by the employers, or by the scheme, to act as the employers' representative for the purposes of this section or, if no such nomination is made, to all of the employers.

(5) Regulations may provide that this section does not apply to occupational pension schemes within a prescribed class or description.

Section 33 Deduction of contributions

(1) An employer who arranges for a person to become a member of a scheme in accordance with section 3(2), 5(2) or 7(3), or of an occupational pension scheme in accordance with section 9(2), may deduct the person's contributions to the scheme from the person's remuneration and pay them to the trustees or managers of the scheme (in the case of an occupational pension scheme) or the provider of the scheme (in the case of a personal pension scheme).

(2) Regulations prescribing arrangements for the purposes of section 3(2), 5(2), 7(3) or 9(2), may require the employer to make such a deduction or payment at any time on or after the date with effect from which the jobholder is to become an active member of a scheme under the arrangements.

Section 34 Effect of failure to comply

(1) Contravention of any of the employer duty provisions does not give rise to a right of action for breach of statutory duty.

(2) But nothing in the employer duty provisions or this Chapter affects any right of action arising apart from those provisions.

(3) In this Chapter, references to the employer duty provisions are references to any provision of sections 2 to 11 or of regulations under those sections.

Section 35 Compliance notices

(1) The Regulator may issue a compliance notice to a person if the Regulator is of the opinion that the person has contravened one or more of the employer duty provisions.

(2) A compliance notice is a notice directing the person to whom it is issued to take, or refrain from taking, the steps specified in the notice in order to remedy the contravention.

(3) A compliance notice may, in particular—

(a) state the period within which any step must be taken or must cease to be taken;

(b) require the person to whom it is issued to provide within a specified period specified information relating to the contravention;

(c) require the person to inform the Regulator, within a specified period, how the person has complied or is complying with the notice;

(d) state that, if the person fails to comply with the requirements of the notice, the Regulator may issue a fixed penalty notice under section 40.

(4) The steps specified in the notice may, in particular, include such steps as the Regulator thinks appropriate for placing the worker in the same position (as nearly as possible) as if the contravention had not occurred.

(5) If the compliance notice is issued in respect of a failure to comply with an enrolment duty and the specified steps relate to membership of a defined benefits scheme or a hybrid scheme, the notice may, in particular, require the employer to ensure that the worker is entitled to the same benefits under the scheme as if the employer had complied with that duty.

Section 36 Third party compliance notices

(1) The Regulator may issue a third party compliance notice if it is of the opinion that—

(a) a person has contravened one or more of the employer duty provisions,

(b) the contravention is or was, wholly or partly, a result of a failure of another person (the “third party”) to do any thing, and

(c) that failure is not itself a contravention of any of the employer duty provisions.

(2) A third party compliance notice is a notice directing the third party to take, or refrain from taking, the steps specified in the notice in order to remedy or prevent a recurrence of the failure.

(3) A third party notice may, in particular—

(a) state the period within which any step must be taken or must cease to be taken;

(b) require the third party to inform the Regulator, within a specified period, how the third party has complied or is complying with the notice;

(c) state that, if the third party fails to comply with the requirements of the notice, the Regulator may issue a fixed penalty notice under section 40.

(4) A third party notice may give the third party a choice between different ways of remedying or preventing the recurrence of the third party's failure.

Section 37 Unpaid contributions notices

(1) The Regulator may issue an unpaid contributions notice to an employer if it is of the opinion that relevant contributions have not been paid on or before the due date.

(2) An unpaid contributions notice is a notice requiring an employer to pay into a pension scheme by a specified date an amount in respect of relevant contributions that have not been paid.

(3) “ Due date ” has the meaning prescribed.

(4) An unpaid contributions notice may, in particular—

(a) specify the scheme to which the contributions are due;

(b) specify the workers, or category of workers, in respect of whom the contributions are due;

(c) state the period in respect of which the contributions are due;

(d) state the due date in respect of the contributions;

(e) require the employer to take such other steps in relation to remedying the failure to pay the contributions as the Regulator considers appropriate;

(f) state that if the employer fails to comply with the notice, the Regulator may issue a fixed penalty notice under section 40.

(5) In this section, “ employer ” in relation to a worker means the person by whom the worker is or, if the employment has ceased, was employed.

Section 38 Calculation and payment of contributions

(1) This section applies to—

(a) a compliance notice issued to an employer in respect of a contravention of section 2(1) or a failure to comply with an enrolment duty;

(b) an unpaid contributions notice.

(2) The notice may, in particular, include—

(a) a requirement to calculate the amount of relevant contributions that are of a description specified in the notice (“unpaid relevant contributions”);

(b) if the contributions are being paid within the prescribed period after the appropriate date, a requirement to pay an amount equal to the amount of unpaid relevant contributions within section 39(2)(a);

(c) if the contributions are not being paid within the prescribed period after the appropriate date, a requirement to pay (on the employer's own account) an amount equal to the amount of unpaid relevant contributions;

(d) if paragraph (b) applies, a requirement to ensure—

(i) that the worker is not required to pay an amount equal to the balance of the unpaid relevant contributions during the prescribed period, and

(ii) that, if the worker chooses to pay that amount, it may be paid in instalments;

(e) if the contributions are payable to a money purchase scheme, a hybrid scheme or a personal pension scheme, a requirement to pay interest on the amount required by the notice to be paid in respect of unpaid relevant contributions, at a rate and in respect of a period determined in accordance with regulations.

(3) The Secretary of State may by regulations make provision about the way in which the Regulator may (without prejudice to subsection (2)(a)) estimate the amount of contributions that an employer has failed to pay on behalf or in respect of a worker.

(4) Regulations under subsection (3) may include, in particular, provision about the sources of information that the Regulator may use in estimating that amount, other than information provided by the employer.

(5) In this section, “ appropriate date ” means—

(a) in the case of a compliance notice, such date as may be specified in the notice;

(b) in the case of an unpaid contributions notice, the due date within the meaning of section 37(3).

(6) In this section, “ employer ” in relation to a worker means the person by whom the worker is or, if the employment has ceased, was employed.

Section 39 Meaning of “relevant contributions”

(1) In sections 37 and 38 “relevant contributions” are—

(a) in relation to a jobholder, employer contributions payable to a qualifying scheme in relation to the jobholder;

(b) in relation to a worker to whom section 9 applies, employer contributions payable to a pension scheme which satisfies the requirements of that section.

(2) In subsection (1), employer contributions means contributions payable by the employer—

(a) on the employer's own account (but in respect of the worker), or

(b) on behalf of the worker out of deductions from the worker's earnings.

Section 40 Fixed penalty notices

(1) The Regulator may issue a fixed penalty notice to a person if it is of the opinion that the person has failed to comply with—

(a) a compliance notice under section 35,

(b) a third party compliance notice under section 36,

(c) an unpaid contributions notice under section 37, ...

(d) a notice issued under section 72 of the Pensions Act 2004 (c. 35) (provision of information) , so far as relevant to the exercise of any of its functions under or by virtue of this Part , or

(e) a notice issued under section 72A of that Act (interviews), so far as relevant to the exercise of any of its functions under or by virtue of this Part.

(2) The Regulator may issue a fixed penalty notice to a person if it is of the opinion that the person has contravened—

(a) any provision of regulations under section 3(2) or 5(2) (prescribed arrangements for automatic enrolment or re-enrolment),

(b) any provision of regulations under section 7(4) (prescribed arrangements: jobholder's right to opt in),

(c) section 8(2)(b) (refund of contributions if jobholder opts out of scheme membership), and any provision of regulations under that provision,

(d) section 10 (requirement to give information to workers), and any provision of regulations under that section, or

(e) any provision of regulations under section 60 (requirement to keep records).

(3) A fixed penalty notice is a notice requiring the person to whom it is issued to pay a penalty within the period specified in the notice.

(4) The penalty—

(a) is to be determined in accordance with regulations, and

(b) must not exceed £50,000.

(5) A fixed penalty notice must—

(a) state the amount of the penalty;

(b) state the date, which must be at least 4 weeks after the date on which the notice is issued, by which the penalty must be paid;

(c) state the period to which the penalty relates;

(d) if the notice is issued under subsection (1), specify the failure to which the notice relates;

(e) if the notice is issued under subsection (2), specify the provision or provisions that have been contravened;

(f) if the notice is issued under subsection (1), state that, if the failure to comply continues, the Regulator may issue an escalating penalty notice under section 41;

(g) notify the person to whom the notice is issued of the review process under section 43 and the right of referral to a tribunal under section 44.

Section 41 Escalating penalty notices

(1) The Regulator may issue an escalating penalty notice to a person if it is of the opinion that the person has failed to comply with—

(a) a compliance notice under section 35,

(b) a third party compliance notice under section 36,

(c) an unpaid contributions notice under section 37, ...

(d) a notice under section 72 of the Pensions Act 2004 (c. 35) (provision of information) , so far as relevant to the exercise of any of its functions under or by virtue of this Part , or

(e) a notice issued under section 72A of that Act (interviews), so far as relevant to the exercise of any of its functions under or by virtue of this Part.

(2) But the Regulator may not issue an escalating penalty notice if—

(a) it relates to failure to comply with a notice within subsection (1)(a), (b) or (c), the person to whom that notice was issued has applied for a review of it under section 43, and any review has not been completed;

(b) it relates to failure to comply with any notice within subsection (1), the person has exercised the right of referral to a tribunal under section 44 in respect of a fixed penalty notice issued in relation to that notice, and the reference has not been determined.

(3) An escalating penalty notice is a notice requiring a person to pay an escalating penalty if the person fails to comply with a notice referred to in subsection (1) before a specified date.

(4) An escalating penalty is a penalty which is calculated by reference to a prescribed daily rate.

(5) The prescribed daily rate—

(a) is to be determined in accordance with regulations, and

(b) must not exceed £10,000.

(6) An escalating penalty notice must—

(a) specify the failure to which the notice relates;

(b) state that, if the person fails to comply with the notice referred to in subsection (1) before a specified date, the person will be liable to pay an escalating penalty;

(c) state the daily rate of the escalating penalty and the way in which the penalty is calculated;

(d) state the date from which the escalating penalty will be payable, which must not be earlier than the date specified in the fixed penalty notice under section 40(5)(b);

(e) state that the escalating penalty will continue to be payable at the daily rate until the date on which the person complies with the notice referred to in subsection (1) or such earlier date as the Regulator may determine;

(f) notify the person of the review process under section 43 and the right of referral to a tribunal under section 44.

Section 42 Penalty notices: recovery

(1) Any penalty payable under section 40 or section 41 is recoverable by the Regulator.

(2) In England and Wales, any such penalty is, if the county court so orders, recoverable under section 85 of the County Courts Act 1984 (c. 28) or otherwise as if it were payable under an order of that court.

(3) In Scotland, a fixed penalty notice or escalating penalty notice is enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff court of any sheriffdom in Scotland.

(4) The Regulator must pay into the Consolidated Fund any penalty recovered under this section.

Section 43 Review of notices

(1) The Regulator may review a notice to which this section applies—

(a) on the written application of the person to whom the notice was issued, or

(b) if the Regulator otherwise considers it appropriate.

(2) This section applies to—

(a) a compliance notice issued under section 35;

(b) a third party compliance notice issued under section 36;

(c) an unpaid contributions notice issued under section 37;

(d) a fixed penalty notice issued under section 40;

(e) an escalating penalty notice issued under section 41.

(3) Regulations may prescribe the period within which—

(a) an application to review a notice may be made under subsection (1)(a);

(b) a notice may be reviewed under subsection (1)(b).

(4) On a review of a notice, the effect of the notice is suspended for the period beginning when the Regulator determines to carry out the review and ending when the review is completed.

(5) In carrying out a review, the Regulator must consider any representations made by the person to whom the notice was issued.

(6) The Regulator's powers on a review include power to—

(a) confirm, vary or revoke the notice;

(b) substitute a different notice.

Section 44 References to First-tier Tribunal or Upper Tribunal

(1) A person to whom a notice is issued under section 40 or 41 may, if one of the conditions in subsection (2) is satisfied, make a reference to the Tribunal in respect of—

(a) the issue of the notice;

(b) the amount of the penalty payable under the notice.

(2) The conditions are—

(a) that the Regulator has completed a review of the notice under section 43;

(b) that the person to whom the notice was issued has made an application for the review of the notice under section 43(1)(a) and the Regulator has determined not to carry out such a review.

(3) On a reference to the Tribunal in respect of a notice, the effect of the notice is suspended for the period beginning when the Tribunal receives notice of the reference and ending—

(a) when the reference is withdrawn or completed, or

(b) if the reference is made out of time, on the Tribunal determining not to allow the reference to proceed.

(4) For the purposes of subsection (3), a reference is completed when—

(a) the reference has been determined,

(b) the Tribunal has remitted the matter to the Regulator, and

(c) any directions of the Tribunal for giving effect to its determination have been complied with.

(4A) In this section “ the Tribunal ”, in relation to a reference under this section, means—

(a) the Upper Tribunal, in any case where it is determined by or under Tribunal Procedure Rules that the Upper Tribunal is to hear the reference;

(b) the First-tier Tribunal, in any other case.

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 45 Offences of failing to comply

(1) An offence is committed by an employer who wilfully fails to comply with—

(a) the duty under section 3(2) (automatic enrolment),

(b) the duty under section 5(2) (automatic re-enrolment), or

(c) the duty under section 7(3) (jobholder's right to opt in).

(2) A person guilty of an offence under this section is liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or both;

(b) on summary conviction to a fine not exceeding the statutory maximum.

Section 46 Offences by bodies corporate

(1) Subsection (2) applies where an offence under section 45 committed by a body corporate is proved—

(a) to have been committed with the consent or connivance of an officer of the body corporate, or

(b) to be attributable to any neglect on the part of an officer of the body corporate.

(2) The officer, as well as the body corporate, is guilty of the offence and is liable to be proceeded against and punished accordingly.

(3) “Officer” in this section means—

(a) a director, manager, secretary or other similar officer, or

(b) a person purporting to act in such a capacity.

(4) Where the affairs of a body corporate are managed by its members, this section applies in relation to the acts and defaults of a member in connection with the member's functions of management as if the member were an officer of the body corporate.

Section 47 Offences by partnerships and unincorporated associations

(1) Proceedings for an offence under section 45 alleged to have been committed by a partnership or an unincorporated association may be brought in the name of the partnership or association.

(2) For the purposes of such proceedings—

(a) rules of court relating to the service of documents are to have effect as if the partnership or association were a body corporate;

(b) the following provisions apply in relation to the partnership or association as they apply in relation to a body corporate—

(i) section 33 of the Criminal Justice Act 1925 (c. 86) and Schedule 3 to the Magistrates' Courts Act 1980 (c. 43);

(ii) section 70 of the Criminal Procedure (Scotland) Act 1995 (c. 46).

(3) A fine imposed on a partnership or association on its conviction of an offence under section 45 is to be paid out of the funds of the partnership or association.

(4) Subsection (5) applies where an offence under section 45 committed by a partnership is proved—

(a) to have been committed with the consent or connivance of a partner, or

(b) to be attributable to any neglect on the part of a partner.

(5) The partner, as well as the partnership, is guilty of the offence and is liable to be proceeded against and punished accordingly.

(6) Subsection (7) applies where an offence under section 45 committed by an unincorporated association is proved—

(a) to have been committed with the consent or connivance of an officer of the association, or

(b) to be attributable to any neglect on the part of an officer of the association.

(7) The officer, as well as the association, is guilty of the offence and is liable to be proceeded against and punished accordingly.

(8) “Officer” in this section means—

(a) an officer of the association or a member of its governing body, or

(b) a person purporting to act in such capacity.

(9) “Partner” in this section includes a person purporting to act as a partner.

Section 48 Offences of providing false or misleading information

In section 80(1)(a) of the Pensions Act 2004 (c. 35) (offences of providing false or misleading information)—

(a) at the end of sub-paragraph (iv) insert

or

(“) regulations under section 11 of the Pensions Act 2008,

(b) omit “or” at the end of sub-paragraph (iii).