On 18 June 2007 The Pensions Regulator (TPR) announced it had published Determination Notices indicating the intention to issue its first Financial Support Direction (FSD)*. The target was passenger transport and marine container leasing company Sea Containers Ltd (SCL), in relation to the two pension schemes of its London-based UK subsidiary Sea Containers Services Ltd. Some may have gained the mistaken idea that SCL was now obliged to cough up, but this is far from true.

*A FSD requires a sufficiently resourced connected or associated party to support a final salary pension scheme within a group. Under the Pensions Act 2004 (ss. 43 - 50) an FSD may be issued where the regulator concludes that the sponsoring employer is a service company or is insufficiently resourced, and it is reasonable to do so.

There is some history behind last month's announcement. A Warning Notice regarding the issue of a FSD was sent to SCL in October 2006. Both SCL and the trustees of the two pension schemes made representations to TPR following this notice. TPR decided it was appropriate to proceed to Determinations Panel* (set up under PA 2004 s.9). The hearing took place on June 12 and 13, at which representations were heard from TPR, the trustees of the two schemes, and SCL.

*TPR's power to issue a FSD is a Reserved Regulatory Function under PA 2004 s.10 & Sch 2 para 33, and as such is exercisable only by the Determinations Panel. Under s.93(3) the Panel must determine its own procedure.

TPR's June 18 announcement stated that "the Financial Support Direction will be issued 28 days from the date of the determination notice. During this 28-day period an appeal may be made." As today arrives 28 days after June 18, in the absence of any evidence of an appeal under PA 2004 s.96 (in the form of a 'reference' to the Pensions Regulator Tribunal* established by s.102), we might have expected to have confirmation from TPR of issue of the FSD.

*The Tribunal is an independent body run by the Department for Constitutional Affairs, which has made detailed procedural rules (SI 2005/690) for the conduct of Tribunal proceedings.

Elsewhere on TPR's website, however, we find a statement that "A directly affected party has 28 days from the date of notification of the decision to make an appeal" (italics added). Given the acreage of PA 2004 devoted to the 'anti-avoidance' rules, one might have expected a reference to the Act to squash this kind of ambiguity. We find, however, that s.103(1) states that "a reference to the Tribunal must be made . . . during the period of 28 days beginning with the day on which the determination notice is given." Thus the question is begged, 'does publication of a determination notice on the TPR website constitute "notification" or "giving" of the notice to the parties affected?'

It seems the answer is ‘no’, because the FSD has not been issued yet. What has happened is that SCL asked that the 28 days should run from the date of publication of the Reasons [PDF] for the determination decision, and TPR's Determinations Panel acceded to this request. As the Reasons were not published until 25 June, SCL have been given until next Monday (23 July) to refer the determination notice to the Tribunal.

Should SCL appeal in this way, and the Tribunal confirm TPR's determination, that would still not necessarily mark the end of the process. SCL could appeal on a point of law under PA 2004 s.104. If a FSD were to be finally issued and it was ignored, the Pensions Act states that TPR may issue a Section 47 Contribution Notice for a specific sum. A statutory debt would then exist which could be pursued through the civil courts.