In line with other non-departmental public bodies, The Pensions Regulator (TPR) has adopted codes of conduct for its board members and its staff.
This code applies to all staff of TPR. See the code of conduct for board members.
Duties and responsibilities
Staff of TPR should familiarise themselves with the contents of the code and should act in accordance with the principles set out in it.
Staff of TPR have a duty:
- to discharge public functions reasonably and according to the law
- to recognise ethical standards governing particular professions
The Chief Executive, who is TPR's accounting officer, has overall responsibility for propriety in a broad sense, including conduct and discipline. All staff will be required to confirm their acceptance of this code and its associated policies / appendices by signing an acceptance form. Breach of its provisions will be treated as a serious disciplinary matter and may result in dismissal.
Accountability
Staff of TPR should be aware:
- of their accountability to the Board
- of the respective roles of the sponsor department (Department for Work and Pensions (DWP)) and TPR as set out in the management statement, and financial memorandum
- that the minister responsible for TPR is ultimately accountable to Parliament for its independence, effectiveness and efficiency
The Board has responsibilities as an employer. These are set out in their own code of conduct for members of TPR Board.
Staff of TPR should conduct themselves with integrity, impartiality and honesty. They should not deceive or knowingly mislead the Board, the sponsor department, ministers, Parliament or the public.
Integrity
When you start work for TPR you must complete a declaration of character and keep your entry up to date. Staff of TPR should not use their official position to receive, agree to, or accept or attempt to obtain any payment or other consideration for doing, or not doing, anything or showing favour, or disfavour, to any person.
They should not receive benefits of any kind from a third party which might reasonably be seen to compromise their personal judgement and integrity. Staff must ensure that they comply with TPR's rules on the acceptance of gifts and hospitality. Further detail about the policy on gifts and hospitality can be found on the intranet.
Staff should also be aware of their obligations under The Bribery Act 2010.
The Bribery Act came into force on 1 July 2011, and the main bribery offences covered are the offering, promising or giving of an advantage, and the requesting, agreeing to receive or accepting of an advantage with the intention that a relevant function be performed improperly.
A quick start guide (PDF) has also been published which sets out the key points.
Relations with the public
Standards of behaviour
Equal opportunities and bullying and harassment
Staff are expected to familiarise themselves with and abide by TPR's equal opportunities and anti-bullying and harassment policies.
Personal relationships at work
A personal relationship with colleagues is acceptable as long as it does not conflict with duties. Any situation where bias would or could reasonably appear to have influenced decisions or outcomes must be avoided. This means staff should inform their line manager if they have a close personal relationship with another employee which could pose a conflict of interest and must not manage or undertake management action (eg take part in a selection exercise) in respect of partners or close relatives.
Use of resources
Information security
Staff[1] are expected to familiarise themselves with and abide by TPR's information management policies.
Staff of TPR owe a general duty of confidentiality to their employer under civil law and have a statutory duty under the Pensions Act 2004, Section 82[2] They are therefore required to protect official information held in confidence. When you start work for TPR you will be required to sign a confidentiality statement confirming your acceptance of these conditions. Any breach of confidentiality will be dealt with as gross misconduct.
Improper use or disclosure of information can lead to prosecution under the Pensions Act 2004 or the Criminal Justice Act 1993[3].
Staff should also be aware of their obligations under the Data Protection Act (1998)[4] and the Freedom of Information Act (2000)[5].
All staff will receive an induction on these matters and further training will be made available to staff if it is required.
Footnotes for this section
- [1] 'Staff' for the purposes of this policy means all staff, permanent and accrued, including executive members of the Board, agency staff, consultants and secondees.
- [2] 'Section 82 of the Pensions Act 2004' prohibits the disclosure of 'restricted information' which means any information obtained by TPR in the exercise of its functions which relates to the business or other affairs of any person.
- [3] 'Criminal Justice Act 1993' makes it a criminal offence for any staff to disclose price-sensitive information to someone or encourage someone else to deal.
- [4] 'Data Protection Act 1998' regulates the processing of 'personal data' relating to individuals, including the obtaining, holding, use or disclosure of such information.
- [5] 'Freedom of Information Act 2000' gives individuals the general right of access to information held by public authorities.
Conflicts of interest
New conflicts of interest must be recorded via the register of interests form and submitted to the register of interests mailbox.
As staff of TPR, we are entitled to manage our own affairs in privacy. However, our work must be carried out in an environment which is free from any suggestion of improper influence. Those providing information must be confident that it will be properly handled and conflicts of interest must be identified immediately as they arise and be properly managed.
Staff of TPR should not misuse their official position or information acquired in their official duties to further their private interests or those of others. The nature of TPR’s functions mean that we often hold unpublished price-sensitive information (UPSI)[6], which is information that could have a significant effect on share prices if disclosed. We treat any information as UPSI if the author or person giving it to us notifies us that it is ‘price-sensitive’, ‘market-sensitive’, or constitutes ‘inside information’, or if we decide the information falls within one or more of these descriptions. The unlawful disclosure of such information may be a criminal offence and would have potentially serious commercial consequences for the companies involved and their employees. Information that may be UPSI must therefore be handled strictly in accordance with TPR’s unpublished price-sensitive information policy.
It is also important that the private interests of staff are not allowed to influence in any way decisions taken in exercising the functions of TPR.
All members of staff are therefore responsible for ensuring that any possible conflicts of interest are identified at an early stage and that appropriate action is taken to resolve them. Secondees will also be expected to be aware of, and to disclose, both personal conflicts of interest, and conflicts of interest of the seconding employer.
There are three key requirements:
- a requirement to declare any potential conflict of interest that may arise in the course of your work
- a requirement to seek permission on each occasion you wish to deal in shares or related investments
- a requirement to complete and keep up to date a declaration of interests which will be recorded in the staff register of interests
Avoiding conflicts of interest
All staff must take steps to ensure that any conflict of interest to which we may be subject does not affect a decision taken by TPR. We must disclose all interests which could conflict with our duties.
No staff must exploit or appear to exploit to their personal advantage or to the advantage of connected persons[7] or those in significant relationships[8] with an authorised individual or an employee of a relevant organisation[9].
What is a conflict of interest?
'A situation where a person or organisation in a position of trust has competing professional or personal interests or concerns.'
A conflict of interest arises when our work for TPR could be affected by a personal interest or personal association. It becomes significant if an independent third party might reasonably take the view that there is a risk that our resultant actions (or those of the personal associate) might be affected, whether or not they are affected.
There are three key types of potential conflict:
- where the personal interests of a member of staff could compromise decisions taken by that person in the course of their work at TPR
- where information gained in the course of work at TPR could be used for personal gain
- for a secondee, where the seconding employer could have a conflict of interest with TPR (eg a current client of the employer is also the subject of a regulatory investigation or action)
Because we deal with such a wide range of people and organisations, it is difficult to give guidance about every kind of situation that could lead to a conflict of interests. You need to consider the type of work you do and who you might be involved with through your work. Conflicts of interest may arise in various ways, further examples can be found at Appendix A.
Procedure for disclosure of interests
When you start work for TPR you are required to complete a declaration of interests for the inclusion in the staff register of interests for TPR which is held by the Corporate Secretary. Further detail can be found at Appendix B.
In addition to disclosures in the staff register of interests, you are under a duty to declare to your manager or others as appropriate any potential conflict of interest which arises in the course of your work whenever it becomes relevant, eg at meetings or during discussions. A general disclosure of interests in your register entry is not a substitute for this.
Where a member of staff is involved in regulatory casework or procurement decisions, and has a financial interest of £10,000 or more in an organisation, or is a member of the organisation's pension scheme, they will normally be withdrawn from any decision-making role in a regulatory case or procurement exercise relating to that organisation. The manager will have discretion as to whether to allocate the work to another member of staff, or allow them to remain involved in the work but not in a decision-making role.
Where the interest is non-financial or is less than £10,000 in value, staff are expected to declare it to their line manager as the occasion arises (and regardless of any entry in the staff register of interests). The line manager will record the declaration and will take a case-by-case view on whether a conflict exists and what action should be taken.
Footnotes for this section
- [6] ‘Unpublished price-sensitive information’ is defined by TPR’s UPSI policy as any information that:
- is notified to the person receiving the information as being 'price-sensitive', 'market sensitive' or as constituting 'inside information' by the author or the person providing the information (unless a case team is of the view that the material in question is not in fact UPSI)
- is considered to be UPSI as a result of a case team decision, considering advice (where relevant) from the case lawyer and / or the case business analyst and reaching a view that the information (which could include a decision taken during the course of an investigation) is UPSI
- relates to a policy measure TPR plans to implement which has the potential to affect the price of securities in a particular industry sector
- is any other information that an individual has reason to believe is UPSI because its disclosure could have a significant effect on share prices (whether or a particular company or companies generally in a particular industry sector)
- [7] 'Connected persons' means spouses and partners, children, step-children under the age of 18, persons for whom members of staff take significant financial decisions and trusts of which a staff member is a trustee.
- [8] 'Significant relationship' means a relationship which an independent third party might reasonably consider could affect your actions of those of a personal associate (whether or not it does affect your conduct).
- [9] 'Relevant organisation' means those companies or any company within the same group of companies, either seeking to be or currently listed in the UK and / or quoted and / or regulated in the UK as appropriate, and includes those seeking clearance, monitoring, enforcement or any other regulatory intervention by TPR.
Dealings in shares and related investments in relevant organisations
Personal dealings in shares and related investments[10]
The Pensions Act 2004 gives TPR a wide range of powers in relation to pension schemes and employers. TPR therefore holds information not just in relation to schemes, but also on employers and corporate transactions. This information is not public and could be used, eg to buy shares ahead of a transaction – known as insider dealing[11] – which is a criminal offence.
The Financial Conduct Authority (FCA) and other financial institutions have faced this issue for some time and to deal with it the Market Abuse Regime[12] was introduced in December 2001 and later updated to take account of the requirements of the Market Abuse Directive. The main provisions of the regime are set out in the Financial Services and Markets Act[13].
It is an offence both to deal on the basis of such information and to require or encourage someone else to deal. One factor to be considered when assessing whether behaviour amounts to market abuse is whether the person concerned has acted in accordance with the standards expected of them given their position in relation to the market. TPR staff are expected to observe the highest standards in relation to their personal dealings. The Market Abuse Regime is a civil regime and in cases where market abuse has occurred, the FCA can impose an unlimited financial penalty.
The UK also has a criminal insider dealing regime which is set out in section 52 of the Criminal Justice Act 1993 (the Act). This makes it a criminal offence for an individual who has information as an insider to deal in securities (including shares, debentures, warrants and options) on a regulated market. TPR may decide, in concluding investigations into a potential misuse of information or insider dealing case, that the behaviour is sufficiently serious to justify a criminal prosecution. An offence under the Act is punishable by up to seven years imprisonment and / or a fine of up to £5,000.
It is essential, both in your interests and those of TPR that proper arrangements are in place which allow both TPR and you to show that individual investment decisions have not been influenced by information made available to you in confidence in the course of our business.
Dealings in shares and related investments in relevant organisations[14]
All staff, including executive directors, must always seek prior clearance to deal in shares and related investments in relevant organisations. To do this, you need to send an email to the TPR request to deal mailbox giving the name and type of shares you wish to deal in. This mailbox is managed by Complaints and Information Disclosure team, and all information is treated as confidential. Consent to deal (or otherwise) will be given within 24 hours of the request. Executive directors should obtain consent from the Chief Executive, and the Chief Executive should obtain the Chair's consent.
You must not deal before clearance has been given or if clearance is refused. Once approval has been given, you are free to deal but must do so within two working days of clearance, failing which you must apply for clearance again.
In exceptional circumstances an employee may be given clearance to sell (but not purchase) shares when they would otherwise be prohibited from doing so (eg an employee faces a pressing financial commitment that cannot otherwise be satisfied). The determination of whether circumstances are exceptional for this purpose will be made by the Corporate Secretary, who may seek independent legal advice and / or guidance from that employee's HR business partner.
This policy cannot be imposed upon the families of TPR staff and other connected persons. However, staff must recognise that there is potential for criticism if a person connected to them is found to have benefited as a result of holding or dealing in shares or related investments in a relevant organisation. In addition, staff should note that it can be an offence under the Criminal Justice Act 1993 'to require or encourage someone else to deal'.
Footnotes for this section
- [10] 'Shares and related investments' includes shares, (including individual company shares held in PEPs or ISAs) bonds, debentures and any other financial investments, including futures, options, financial spread bets and other financial derivates.
- [11] 'Insider dealing' involving the purchase or sale of shares by someone who possesses inside information about a company's performance and prospects which is not yet available to the market as a whole, and which, if available, might affect the share price.
- [12] 'Market Abuse Regime' is a directive which introduces a common EU approach for preventing and detecting market abuse and ensuring a proper flow of information to the market.
- [13] 'Financial Services and Markets Act' provides the framework within which the single regulator for the financial services industry, the Financial Services Authority, operates.
- [14] 'Dealings' includes purchase, sales, subscriptions, acceptance of takeover and other offers and all other methods of acquiring or disposing of shares and related investments or any rights or interests in shares and related investments.
Staff concerns about improper conduct
TPR has a staff whistleblowing policy. If staff believe that they are being required to act in way which:
- is illegal, improper, or unethical
- is in breach of a professional code
- may involve possible maladministration, fraud or misuse of public funds
- is otherwise inconsistent with this code
They should either raise the matter through the management line or else approach the corporate secretary in confidence. The corporate secretary is entrusted under TPR's staff whistleblowing policy with the duty of investigating staff concerns about illegal, improper or unethical behaviour.
Staff should also draw attention to cases where:
- they believe there is evidence of irregular or improper behaviour elsewhere in the organisation, but where they have not been personally involved
- there is evidence of criminal or unlawful activity by other
- they are required to act in a way which, for them, raises a fundamental issue of conscience
Where a member of staff has reported a matter to TPR but believes that the response does not represent a reasonable response to the grounds of his or her concern, they may report the matter in writing to a nominated official in the DWP, or to the Chair of TPR’s Audit and Risk Assurance Committee, who will investigate the matter further.
Further detail about the staff whistleblowing policy can be found in the staff handbook. Staff should also familiarise themselves with the fraud policy also available in the staff handbook.
After leaving employment
Appendix A
Examples of conflicts of interests
- If you ever place orders or are involved in drawing up or signing contracts on behalf of TPR, you should consider the kind of parties who could be involved when completing your register entry (eg you have a family interest in a local print company).
- If you work in the regulatory part of the business and you (or a connected person) are on the committee of or do voluntary work for a charity, you could face a possible conflict if the charity has a pension scheme.
- If you are asked to be a trustee of a pension scheme, or a voluntary board member of an organisation connected with the pensions industry. We do not wish to prevent staff from taking up such positions, but we would expect staff to consult their director and the corporate secretary before doing so. Guidance on conduct will be given.
- If someone close (ie a connected person or in a significant relationship) to you works in the pensions industry it is possible that you could find yourself involved with them or their company through your regulatory work.
- You could find yourself dealing with a case involving a previous employer.
- You could be involved in a case involving a pension scheme or company from whom you or someone close to you could benefit financially by, for example, dealing in shares.
This guidance is not exhaustive, nor will all of the examples necessarily give rise to significant conflicts of interest. If you are in doubt about whether a conflict has arisen please consult your line manager, or the Corporate Secretary.
Appendix B
Staff register of interests – questions and answers
What is the purpose of the register?
As a regulator we have significant powers that we can exercise against pension schemes, employers and other bodies. We need to be able to show that the decisions we take are fair and impartial. The register helps us to show that we are aware of the need to ensure decisions are not influenced by the personal interests of staff. It helps managers to allocate work so as to avoid conflicts arising and helps to protect staff against any suggestion that personal interests have influenced decisions.
What does the register show?
The register provides information about any direct or indirect pecuniary interests, or other material benefit, or allegiance, which staff may have, which could influence their deliberations, judgement and actions. (‘Pecuniary’ means ‘relating to, concerning or consisting of money’.) It is intended to provide a mechanism whereby possible conflicts of interest can be identified. Interests can be of a financial or non-financial nature. Indirect pecuniary interests arise from connections with people or bodies which have a direct pecuniary interest, or from being a partner of or closely related to a person with such interests. (See definitions of ‘connected persons’ and ‘significant relationship’ at Appendix A of the staff code of conduct.)
Isn’t this an invasion of privacy?
The register could only be construed as an invasion of privacy if it was made public or widely available within TPR, or if it was kept for no purpose. None of these apply. The register is confidential and is not published. It is held and maintained by the corporate secretary.
Only the Chief Executive and the Corporate Secretary may view the register as a whole.
The confidentiality statement and declaration of character forms will be held on personal files by HR.
Applications to deal will be held by the Corporate Secretary on the staff register of interests (attached to the relevant member of staff’s entry).
What if I find myself dealing with someone I haven’t declared on my entry?
The existence of the register does not remove the obligation on you to declare interests as they arise in the course of your work. If during the course of your work you find yourself dealing with a person, firm or organisation with whom you might have a direct or indirect interest whether or not you have already declared this on your register of interests entry – you should immediately advise your line manager. Your manager will decide whether it is appropriate for you to continue to be involved and a written note should be made of this for inclusion on the file (the note will be attached to your register entry). Failure to declare a conflict of interest could be a disciplinary offence.
Who is included on the register?
All staff of TPR are expected to supply information for the register. A separate, published, register is kept of board members’ interests. Executive directors are expected to provide an entry for both registers.
You should provide a register entry even if this is a nil return. It is your responsibility to notify the Corporate Secretary as and when required to ensure your register entry is kept up to date. The Corporate Secretary will issue an annual reminder to all staff about the need to keep the register up to date.
Please see the Conflicts of interest section in the code for guidance on potential conflicts of interest. The section headed ’definitions’ below also explains what kind of information should be disclosed.
Does this mean I can’t deal in my job with any matters that involve a company in which I hold more than £5,000 of shares? Why has this level been chosen?
As a rule, staff will not be allocated work in connection with a company in which they hold shares of at least £5,000 in value. Below this level, your manager will make the judgement as to whether you can remain involved in a particular case but this will not be in a decision-making role. This will be a case-by-case matter, depending on the issues involved in the case, size of the company etc.
The £5,000 level above which we ask staff to declare an interest was chosen with the intention of striking a balance between the level of disclosure needed to protect the integrity of TPR, and the desire to minimise the intrusion upon staff’s personal affairs. You are not expected to declare in the register any other information regarding the amount or value of any investments that you hold.
What will TPR do if a spouse / partner or member of staff refuses to declare information?
We want to avoid any accusation that TPR has not acted impartially. Therefore staff are asked to declare relevant pecuniary interests, where known, of connected persons (eg spouse / partner) and, where necessary, of other third parties (eg close friends / family) with whom you have a ‘significant relationship’. If those other parties do not wish these interests to be disclosed then the member of staff will not be able to include them on their register entry.
All new members of staff are required to complete a register entry on joining TPR.
A register entry will be required (if not already provided) to allow promotions or voluntary transfers to proceed.
Definitions in relation to the staff register of interests
- Previous employers – any post, other employment or fiduciary positions which you hold, or have held in the past five years in connection with a relevant organisation.
- Directorships – remunerated directorships of public or private companies which you or a connected person (eg your spouse or partner) currently hold which could come with the sphere of TPR’s work or with whom the regulator could enter into a contract.
- Membership of occupational pension schemes: (excluding civil service): names of occupational pension schemes of which you or a connected person (eg your spouse or partner) is a member or trustee, excluding the Principal Civil Service Pension Scheme.
- Stakeholder / personal pensions – the name of the provider of any such pension held by you or a connected person. [Note – this includes all such pensions you hold regardless of value (but no information is required as to the value of the pension)].
- Declarable shareholdings – the names of companies or other bodies in which you, or a connected person have a beneficial interest in shareholdings of a market value in excess of £5,000 or hold more than one-hundredth of the issued share capital. [Note – no other information about the value of investments held is required.]
- Other business interests – any current business interests, including offices held in non-profit organisations or trade associations or other unremunerated directorships, which you or a connected person hold and which could come within the sphere of TPR’s work or with whom the regulator could enter into a contract.