CDC code in force: 1 August 2022
If a triggering event occurs, the trustees must produce an implementation strategyIP1. This is a plan for how the trustees will implement their chosen continuity option and should be a more detailed version of the higher-level plan in the continuity strategy.
The implementation strategy must be submitted to us for approval within 28 days of the triggering event occurring or becoming finalIP2.
Triggering events
Triggering events are events that may indicate that the scheme cannot continue to operateIP3. We must be notified that a triggering event has occurred unless we instigated it (events 1 to 3)IP4.
We expect the trustees to have robust procedures for monitoring risks to the scheme, and to be able to identify a triggering event when it occurs. Consequently, where the trustees decide that the scheme is at risk of failure and it is necessary to pursue one of the continuity options, the continuity strategy should in most cases have already identified the risk leading to the failure. In many cases, an associated significant event should have already been reported to us, and the trustees should be in dialogue with us at the time of the triggering event notification.
Notifications to TPR about triggering events
If a scheme experiences a triggering event, the trustees, or the employers or former employers must notify us within seven days after the event occurs or, in some cases, after they become aware that it has occurredIP5. If you are unsure whether a triggering event has occurred, you should seek professional advice.
Some triggering events must be reported when a decision has been madeIP6. Only binding decisions should be reported, not plans or proposals. A decision can be taken outside a formal meeting and our expectation is that where clear steps have been taken regarding an event, without a formal minuted decision, a notification will need to be made. The table below sets out the triggering events that you need to notify us of.
| Triggering event | Date event occurs |
|---|---|
| 4 An employer or relevant former employer has an insolvency event |
The date of the insolvency event |
| 5 An employer or relevant former employer becomes unlikely to continue as a going concern |
The date the employer or relevant former employer becomes aware it is unlikely to continue as a going concern |
| 6 A person decides that the scheme should be wound up (where the person making ;the decision has the power to do so under the scheme rules) |
The date of the decision |
| 7 An event occurs which is required or permitted by the scheme rules to result in the scheme winding up |
The date on which the event occurs |
| 8 A person decides that the scheme should become a closed scheme (where the person making the decision has the power to do so under the scheme rules) |
The date of the decision |
| 9 An event occurs which is required or permitted by the scheme rules to result in the scheme becoming a closed scheme |
Notification duties attached to the above triggering events fall into two categories:
- Category 1: persons more closely involved with the event must notify us within seven days starting with the date of the event itself.
- Category 2: other persons must notify us within seven days starting with the date they first become aware of the event.
| Person with duty to report to TPR | Category 1: within 7 days of date of triggering event | Category 2: within 7 days of becoming aware of triggering event |
|---|---|---|
| Employer/relevant former employer |
|
|
| Trustees |
|
|
| Other decision-maker |
|
A triggering event will also arise where there is a warning notice about a decision to withdraw a scheme’s authorisation (or in some cases a determination about such a decision), or a notice from us that a scheme is not authorised. These do not have to be notified to us.
Other notifications about triggering events
Trustees must also notify an employer or former employer within 14 days of the event (or of the trustees becoming aware of it):
- that the triggering event has occurred, unless the triggering event related to or was instigated by the employer or former employer
- of the date on which the trustees intend to or did submit the implementation strategy to us
- that the implementation strategy will be made available to the employer or former employer within seven days after it has been approved by usIP7
An employer, former employer or other person to whom a triggering event relates or by whom it was instigated must notify the trustee of the triggering event within two days of it taking placeIP8
Content of an implementation strategy
The implementation strategy must include the information in regulation 28 and mustIP9:
- show that the trustees have carefully considered and applied the requirements of the Act and Regulations, as well as the provisions of the code
- contain an analysis of the risks to members’ benefits, and provide adequate mitigations
- set out an appropriate and realistic timescale for dealing with the triggering event in relation to the chosen continuity option
- explain why the chosen continuity option is being pursued
- where the trustees have decided to pursue continuity option 2 (resolving the triggering event), set out in detail the conditions and timescales that may lead the trustees to instead pursue continuity option 1 (discharge of liabilities and winding up) or continuity option 3 (conversion to closed scheme)
- where the trustees have decided to pursue continuity option 1 (discharge of liabilities and winding up), include details of the receiving scheme and any other retirement vehicle the trustees intend to transfer members to
- provide details of the plan for calling on the financial reserves to cover the costs of complying with the relevant continuity option, including actuarial, legal and other service provider requirements
- wherever the implementation strategy includes cost estimates, include a statement of the factors that may cause these estimates to vary, and by how much
Charges
The implementation strategy must set out a statement of administration charges calculated using the method in regulation 27, and include:
- the lower of the administration charges for the year before and the year of the triggering event, and not impose any additional administrative charges beyond those allowed for in the Regulations
- the reason for imposing any additional or third-party charges
Reporting
During a triggering event period, the trustees must submit periodic reports to us, with the first report due within 14 days of notification that their implementation strategy has been approvedIP10.
We will notify the trustees of the timing for the second and subsequent reportsIP11, and may ask for more information. When trustees report on the implementation of the communication plan, we will assess how they are monitoring how well members understand their options.
Under continuity option 2, when trustees consider that the triggering event has been resolved, they must notify us with an explanation within 14 daysIP12.
Under continuity option 3, trustees will need to inform us within 28 days when they consider the preparations for closing the scheme are completeIP13.
Legal references
IP1 Section 39(1) of the Act
IP2 Regulation 26 of the Regulations
IP3 Section 31 of the Act
IP4 Section 33 of the Act
IP5 Regulations 25(2) and (3) of the Regulations
IP6 Section 31(4) of the Act, items 6 and 8
IP7 Sections 33(3) and (4) of the Act and Regulation 25 of the Regulations
IP8 Section 33(9) of the Act and Regulation 25(2)(c) and (3)(c)(ii) of the Regulations
IP9 Regulation 28(2)(c) of the Regulations
IP10 Section 43(1) of the Act and Regulation 32(1) of the Regulations
IP11 Section 43(3) of the Act
IP12 Section 37(2) of the Act and Regulation 30 of the Regulations
IP13Section 38(2) of the Act and Regulation 31 of the Regulations