Alarm raised over delayed pensions payments

15 Apr 2013 | 09:22 am | 1 min. read

An alarming rise in the number of late payments made into company pension schemes could cause concern for UK pensioners and be indicative of economic problems laying ahead, according to specialist Restructuring lawyers at international law firm Pinsent Masons.

Research by Pinsent Masons indicates that the number of late payments by employers being flagged with the UK Pensions Regulator show a 35% rise in late payments during last year, growing from 6787 in 2011 to 9172 in 2012. *

The figures also show that the number of late payment notifications has reached its highest point in the past 5 years - exceeding even the number of delays to pension payments at the height of the credit crisis.

Under UK pensions rules Trustees of pension schemes are required to inform The Pensions Regulator when contributions from employers are received late, particularly if contributions remain unpaid after 90 days and are of 'material significance'.

According to Restructuring specialists at Pinsent Masons, the rise could signal an impending wave of restructurings and insolvencies.

Jamie White, Partner and Head of Restructuring at Pinsent Masons, says:
"Time and again we have seen in insolvency proceedings that when companies are in distress pension payments are deferred or not paid at all in an attempt to free up cash. This can buy time but creates - or adds to - a deficit while the business tries to trade its way out of trouble.

"The latest increase does raise real concerns. A proportion of this increase can be put down to the increased profile and vigilance of the regulator and improved compliance by industry - and particularly the insurance companies administering the schemes. However, those factors alone do not sufficiently explain the trend. The Pensions Regulator stipulates that it should only be notified of late payments if they are of 'material significance'.[1]"

Pinsent Masons points out that, although there will be concern around the significance of an increase in late payments, pensioners themselves have some protection in the event of insolvency.
The Pension Protection Fund protects members of eligible defined benefit pension schemes when there is a qualifying insolvency event in relation to the employer and where there are insufficient assets in the pension scheme.  

White concludes, "A 'lifeboat' fund does exist to support pensioners where schemes have failed, but if we do see large-scale insolvencies there will be questions around the level of support available."

The firm also points out that failure to pay pension scheme contributions on time can result in penalties and even criminal sanctions.

Latest press releases

Show me all press releases

Pinsent Masons MPillay advises Coro Energy plc on sale of European gas business

Multinational law firm Pinsent Masons MPillay has advised Southeast Asian energy company Coro Energy plc on the sale of Coro Europe Limited to Zodiac Energy plc.

Pinsent Masons advises Desay on the sale of its spare parts business to ATTB

Multinational law firm Pinsent Masons has advised Desay SV Automotive Europe GmbH, a fully owned subsidiary of Huizhou Desay SV Automotive Co, Ltd, on the sale of its spare parts business to ATTB Antennentechnik Bad Blankenburg GmbH.

Pinsent Masons advises DCC Energy on its largest acquisition to date in Germany

Multinational law firm Pinsent Masons advised DCC Energy, a division of the leading international sales, marketing, and support services group DCC plc on the acquisition of Progas Group, a leading distributor of LPG in Germany.

People who viewed this press release also viewed

Show me all press releases

Pinsent Masons hires tax partner in London

Multinational law firm Pinsent Masons has recruited VAT specialist, Bryn Reynolds as partner into its London office.

Pinsent Masons hires Irish funds partner Conor Durkin

Multinational law firm Pinsent Masons has hired funds partner Conor Durkin to lead its funds team in Dublin as it continues to grow its pan-European funds capabilities.

Pinsent Masons advises Erisbeg on acquisition of Fruition

Multinational law firm Pinsent Masons has advised Dublin-headquartered private equity firm Erisbeg on a majority investment in Fruition IT and Fruition Consulting.

For all media enquiries, including arranging an interview with one of our spokespeople, please contact the press office on

+44 (0)20 7418 8199 or 

Location contacts

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.