The Pensions Regulator – Code of Practice 12: Application of the Material Detriment Test


Sacker & Partners LLP has responded to the consultation relating to the Pension Regulator’s consultation on its latest draft code of practice, on the application of the “material detriment test”. The test allows the Regulator to require a contribution to be made to a pension scheme where an act or omission has “detrimentally affected in a material way the likelihood of accrued scheme benefits being received”. The consultation closed on 6 February 2009. The material detriment test is one of a number of new anti-avoidance powers designed to tackle “new business models” in pensions which, in severing the link between sponsor and scheme, might reduce security for members and increase the risk of schemes going into the Pension Protection Fund. The code of practice is required by statute to ensure that the test is adequately targeted and sets out a list of circumstances in which the Regulator expects to use this power.

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