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FOI reference - FOI 2016-06-05
Date - 05/06/2016

Request

  1. The number of anti-avoidance cases that The Pensions Regulator (TPR) has opened in the last three years.
  2. The names of the pension schemes associated with question 1 above.
  3. The outcomes of all anti-avoidance case that have been opened by TPR.

Response

Duty to confirm or deny whether TPR holds the information requested

I can confirm that we hold the information you have requested. However, we are unable to supply some of the information requested for the reasons set out below.

Information we are able to supply

We have opened 29 avoidance cases in the last three years, from the date of your request. Sixteen of these cases are still open at the time of this request. In relation to the thirteen cases that are now closed, we did not exercise anti-avoidance powers. At this time we cannot provide outcomes for the sixteen remaining open cases as they are still ongoing. For completeness, please note that there are other ongoing anti-avoidance investigations which have been open for more than three years.

Information we are not able to supply

Section 31(1)(g) and (2)(b)-(c)

We are not able to disclose the names of the schemes to which the anti-avoidance cases relate, as doing so would be likely to prejudice the exercise of our functions as a regulator. To operate as an effective regulator we need information about ‘notifiable’ events or other potential avoidance activity to flow to us from voluntary whistleblowing reports and through statutory reporting, so it is important that we ensure no one is deterred from contacting us.

There is a risk that naming schemes under investigation or that have been investigated would harm their reputation through the presumption of wrong doing on the part of the employer or parties connected or associated with the employer. This in turn could impact negatively on these schemes and employers in terms of their reputation and other business activities thus leading whistleblowers to possibly withhold information on ‘notifiable’ events or other potential avoidance activity rather than being open and forthcoming.

Given the above we consider the information you have requested is exempt under section 31(1)(g) and (2)(b)-(c) of the Freedom of Information Act (FoIA).

Section 31(1)(g) and (2)(b)-(c) provides that:

Information which is not exempt information by virtue of section 30 is exempt information if its disclosure under this Act would, or would be likely to, prejudice:

(g) the exercise by any public authority of its functions for any of the purposes specified in subsection (2)

(2)(b) the purpose of ascertaining whether any person is responsible for any conduct which is improper

(2)(c) the purpose of ascertaining whether circumstances which would justify regulatory action in pursuance of any enactment exist or may arise

TPR’s objectives under section 5 of the Pensions Act 2004 include the protection of members’ benefits under occupational and personal pension schemes; to reduce the risk of circumstances arising in which claims may be made on the Pension Protection Fund; and to promote and improve the understanding and good administration of work-based pension schemes.

In meeting our statutory objectives, TPR must carefully balance the competing public interests in transparency and accountability and in ensuring that we do not put out information that could impact negatively the behaviours of those in the regulated community in a way that would interfere with the achievement of those objectives.

Disclosure under the FoIA is treated as a disclosure to the general public and in these circumstances we have to consider whether disclosure of the information requested is truly in the public interest. There is a requirement on employers and trustees to report scheme and employer related events to us under the notifiable events regime.

Cases are also opened as a result of voluntary whistleblower reports or information provided by the trustees on a voluntary basis. TPR relies heavily on the co-operation of the regulated community in voluntarily and / or promptly disclosing information to us which in turn enables us to obtain the information we require in order to assess whether or not use of our statutory powers is warranted.

Disclosure of the scheme names may discourage trustees and others from reporting these events in the future and would be likely to prejudice the exercise of TPR’s functions for the purposes in section 31(2)(b) and (c) for the reasons set out below.

The public interest assessment

Arguments supporting the public interest in disclosure

As a public body, TPR recognises the need to be open and transparent within the spirit of the FoIA in line with the Government’s transparency agenda, and to ensure it promotes accountability for, and transparency of, decisions taken by it. This is especially pertinent in respect of financial accountability.

There is a strong public interest in transparency and accountability in disclosing information about anti-avoidance cases and how TPR achieves its statutory objectives in line with the government's transparency agenda (where this would not inhibit current or future cases and regulatory action carried out by TPR). This is why TPR proactively publishes reports in respect of its actions, where appropriate, under section 89 of the Pension Act 2004.

Arguments supporting the public interest in maintaining the exemption

However, as stated above disclosure of the scheme names may discourage trustees or whistleblowers voluntarily reporting certain events to us in the future and if employers and trustees do not promptly report those events, then TPR will be required to expend even more resources and efforts in uncovering such events. Furthermore, the resulting investigation sometimes leads to further regulatory action being taken and other times it doesn’t and the case is closed. However, if these schemes are named in response to this request there is a risk of negative impact on these schemes even where our investigation was closed without further action, which may discourage schemes in similar circumstances from notifying TPR promptly. We therefore consider that by disclosing this information it would impede TPR’s ability to effectively exercise its functions to achieve its statutory objectives of protecting the benefits of members of occupational pension schemes and reducing the risk of situations arising which may lead to compensation being payable from the Pensions Protection Fund, for the reasons set out above. This would not be in the public interest.

In the circumstances, we consider that the public interest in disclosure is outweighed by the public interest in maintaining the exemption on this occasion.

Section 43 (2)

We also consider that the information on names is exempt under section 43(2) of FoIA. This is because disclosure of the names of the schemes investigated in connection with anti-avoidance allegations would be likely to prejudice the commercial interests of those schemes and the associated employers. Naming a scheme in this connection runs the risk that some element of wrong doing would be assumed notwithstanding any statement to the contrary by TPR which may risk causing them difficulty in relation to their commercial activities which would be an unfortunate consequence based purely on an investigation by TPR having taken place. This is a prejudice unwarranted and / or unintended particularly in cases where the investigation is closed without TPR using its powers.

In these circumstances, we consider the commercial interest exemption is engaged. For the avoidance of doubt, we would add that we understand that information cannot be withheld simply because it would cause embarrassment. However, that is not what is being asserted here, rather that there is a real risk of harm to these schemes’ and employers’ commercial interests which would not be warranted or intended, and therefore would be unfair if we were to disclose their names as requested.

We are able to publish reports on action we have taken in individual cases where we consider it is appropriate to do so. Section 89 of the Pensions Act 2004 enables us to do this, but in every case we have to consider whether it is fair and reasonable in all the circumstances of the case and in the public interest to do so. I have included further information about section 89 in the section below on the 'duty to provide advice and assistance'.

Public interest

We believe that it would be likely to prejudice the commercial interests of those schemes we have investigated if we were to disclose their names in response to your request. Given that one of our statutory objectives is to protect the benefits of members of pension schemes disclosing information in a way which could damage the interest of pension schemes and in turn members’ benefits would be contrary to the achievement of that statutory objective.

We consider there is an overriding public interest in protecting members’ benefits and in TPR being able to achieve its statutory objective to protect members’ benefits which outweighs the public interest in publication of the information on scheme names in these circumstances.

In relation to this aspect of your request therefore, we do not consider the general public interest in disclosing names of the company’s which we have or are being investigated is stronger or greater than the public interest in maintaining the exemption for the reasons set out above.

Duty to provide advice and assistance

I am mindful of the duty to provide advice and assistance to requesters, as far as it is reasonably practicable to do so.

We are committed to being open and transparent in our activities, which includes publishing information under section 89 of the Pensions Act 2004 about regulatory and enforcement decisions. Further information regarding our approach to publishing information about cases can be found in our essential guide to how we publish information about cases (PDF, 70kb, 6 pages).

A current list of determinations can be found in published determinations.

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