We will use our powers, schemes warned
Friday 25 May 2018
A report published today shows how The Pensions Regulator (TPR) used clear and robust negotiation to secure millions of pounds for pension savers.
TPR’s latest quarterly compliance and enforcement bulletin (PDF, 67kb, 16 pages) includes an example of where the regulator used its enforcement powers to safeguard member benefits.
The report outlines the case of a global company which agreed to pay £3 million into its defined benefit (DB) pension scheme after TPR opened an anti-avoidance investigation because of concerns that members’ pensions were being put at risk.
TPR’s Executive Director of Frontline Regulation, Nicola Parish, said: “We are working to be a clearer, quicker and tougher regulator. Very often, being clear that we are fully prepared to use our powers gets employers and trustees to the table and means members are safeguarded more quickly. Several cases are resolved thanks to clear and robust negotiation by our case teams and the early engagement of companies and trustees.”
The bulletin for January to March 2018 also details the use of TPR’s powers to ensure employers meet their automatic enrolment pension duties.
Due to the expected high volume of employers who reached their staging date last autumn, the number of times TPR used its powers in this quarter makes up 20% of all the powers used since the start of automatic enrolment.
TPR’s Director of Automatic Enrolment, Darren Ryder, said: “Huge numbers of employers are starting their workplace pensions duties every month and the vast majority are successfully meeting their duties. However, where an employer fails to do the right thing for their staff, we will take action using the wide range of powers available to us.”
The bulletin highlights:
- A total of 35,862 enforcement powers were used between January and March 2018 compared to 28,446 the previous quarter.
- 3,721 more fixed penalty notices were issued this quarter compared to last quarter.
- 2,037 more compliance notices were issued this quarter compared to last quarter.
- 431 more unpaid contribution notices were issued this quarter compared to last quarter.
- For the first time, TPR:
- used its powers under section 16 of the Pensions Act to obtain a court order requiring four scammers to pay back the money they had taken from the pension schemes
- fined a professional trustee for failing to maintain registrable information
- TPR used its powers to enforce governance and administration rules against schemes 62 times between January and March. These include Mandatory Penalty Notices for failing to produce a chair’s statement, submitting a non compliant chair’s statement and failure to complete a scheme return on time.
- TPR used its information gathering powers 45 times.
- There were 105 trustees appointed by TPR to run schemes to protect members’ benefits.
- The case study in the bulletin looks at a global company which was the sponsoring employer of a DB scheme with an estimated buy out deficit of £33 million. TPR expressed concerns about the funding position of the scheme and began investigating whether financial support should be provided by the wider group through the use of its anti-avoidance powers. Through negotiation, agreement was reached that the parent company would provide support for the scheme which would significantly improve the funding position and the likelihood members’ benefits would be met in full.
- 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 TPR’s functions under Part 3 of the Pensions Act 2004 only).
Ciara Bridge-Butler 01273 662018