TPR issues first chair’s statement fines against master trust schemes
Monday 9 January 2017
The Pensions Regulator (TPR) has issued its first fines against a number of master trust schemes for failing to complete a chair’s statement.
The trustee of Nurture Master Trust, MC Trustees Ltd, was ordered to pay a fine of £2,000 for failing to prepare a chair’s statement for the scheme. The maximum fine of £2,000 was imposed because the scheme had a professional trustee in place and there were no mitigating factors.
In separate action the trustees of the Save and Prosper Funds were fined a total of £3,020 after failing to prepare a chair’s statement for three master trust schemes.
TPR has issued a regulatory intervention report (PDF, 196kb, 5 pages) about both cases. In all the schemes the relevant trustee has now produced chair’s statements.
Nicola Parish, Executive Director for Frontline Regulation at TPR, said: “Completion of the chair’s statement by trustees is a basic requirement of good governance and we expect trustees to comply.
“We will enforce the law and impose a penalty where trustees of schemes fail to prepare an annual governance statement signed by the chair of trustees. These requirements apply equally to trustees of master trusts.
“These latest fines result from our ongoing focus on ensuring that trustees comply with the requirements of good governance.
“Trustees should be aware that this type of breach will result in a fine and we hope that our latest report will act as a reminder to all trustees, professional or otherwise, to ensure they complete the chair’s statement fully and on time.”
Trustees are required to confirm that they have completed the chair’s statement via the scheme return. TPR is supporting trustees in numerous ways, including new web guidance and news-by-email to help them understand how to complete the new scheme return, including confirmation of completion of a chair’s statement, to demonstrate they are meeting new governance standards.
- Occupational schemes providing any money purchase benefits other than those arising from additional voluntary contributions (AVCs) are now required by law to prepare an annual statement, signed by the chair of the trustees, within seven months of the end of each scheme year.
- Professional trustees are expected to meet a higher standard of care and to demonstrate a greater level of knowledge and understanding than other trustees.
- The three Save and Prosper master trust schemes are Save and Prosper Personal Retirement Account, Save and Prosper Company Pension Scheme and Save and Prosper Personal Retirement Account Simplified Pension Scheme.
- TPR has in recent months published details of other fines against DC schemes for failing to provide a scheme return, and failing to prepare chair’s statement.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are: to protect members’ benefits; to reduce the risk of calls on the Pension Protection Fund (PPF); to promote, and to improve understanding of, the good administration of work-based pension schemes; to maximise employer compliance with automatic enrolment duties; and to minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pensions Act 2004 only).
Tim Marks 01273 662092