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Pension scheme trustees fined and named for producing non-compliant documents

Ref: PN18-11
Thursday 15 February 2018

Pension schemes that have produced non-compliant chair’s statements have been named for the first time by The Pensions Regulator (TPR).

Lists published today include six pension schemes whose trustees have been fined for this offence. The professional trustees of these schemes are also named.

Nicola Parish, TPR’s Executive Director of Frontline Regulation, said: “What some trustees put together as a chair’s statement is disappointing. These statements are important documents and should demonstrate to scheme members that the trustees are doing a good job and savers’ money is being well looked after.

“This is not just a tick box exercise. The chair’s statement should make declarations about key aspects of governance, from making sure a scheme’s costs and charges represent good value for money to assessing the skills and knowledge of trustees. A statement with little explanation offers no comfort to pension savers that their money is safe.

“We offer a quick guide for trustees about how to complete a chair’s statement (PDF, 67kb, 12 pages) to guide them through the process, so there is really no excuse. Schemes that don’t meet the requirements will not only get a fine, but will now be named on our website too.”

The lists which are updated every three months, accompany TPR’s quarterly compliance and enforcement bulletin (PDF, 446kb, 13 pages).

The bulletin also highlights the case of a business found to be wilfully non-compliant and avoiding its automatic enrolment responsibilities. TPR’s lists include 29 employers taken to court in the quarter for failing to pay escalating penalty notices imposed because they failed to meet their automatic enrolment duties. The fines total more than £240,000.

The bulletin also highlights:

Automatic enrolment

  • 4,197 more compliance notices were issued to employers compared to the last quarter for failing to meet automatic enrolment duties.
  • 1,956 more fixed penalty notices issued in the last three months to employers for failing to comply with a statutory notice or a specific duty, compared to the last quarter
  • A total of 28,446 cases of enforcement powers being used in automatic enrolment between October and December 2017.

Pension schemes

  • TPR used its powers to enforce governance and administration rules against schemes 235 times between October and December last year.
  • There were 130 trustees appointed by TPR to run schemes to ensure they were properly administered.
  • Enforcement action taken for the first time against trustees or scheme managers who failed to get their defined benefit (DB) scheme accounts audited within seven months of the end of the scheme year.

Editor's notes

  1. The chair’s statement is a mandatory statement that trustees of defined contribution (DC) schemes are required to prepare annually, signed by the chair of trustees, within seven months of the end of each scheme year.
  2. While the volume of compliance notices issued has increased, this is in proportion to the number of employers reaching their staging date. The total number of employers to meet their duties is now more than one million showing that saving into a workplace pension is now the norm.
  3. The quarterly lists have been updated to include six pension schemes, and the names of professional trustees on the scheme at the time the fine was imposed, which have been fined for producing a non-compliant chair’s statement. One features on the list for last quarter, five feature on the historic list.
  4. TPR has published guidance on how to produce a chair’s statement (PDF, 67kb, 12 pages) to support trustees and providers. It sets out the legal requirements in relation to the chair’s statement and our expectations as to how trustees should meet them. We are not proposing any new requirements, merely seeking to clarify the expectations already set out in our code and accompanying guidance.
  5. The first quarterly list includes four employers who have been given escalating penalty notices (EPNs) for a collective total of more than £42,000, which they have paid. However, despite having paid the EPNs between October and December 2017, these employers continue to be non-compliant with their workplace pension duties. Employers named in the previous quarter who are now compliant have been removed from the list.
  6. The second list features 29 employers who were issued with EPNs for a collective total of around more nearly £240,000. These employers failed to pay their EPNs so TPR secured court orders against them requiring payment. They include both compliant businesses, and non-compliant businesses whose cases are being reviewed over the potential for further action. In the previous quarter, 169 employers were named after being given county court judgments for a collective total of more than £1.25 million.
  7. For Frontline Regulation, the quarterly lists outline 38 fines handed to the trustees of 35 schemes and totalling £23,141.20 for failures to prepare a chair statement.
  8. 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); 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).

Press contacts

Kimberly Middleton (DC) 01273 349554

Ciara Bridge-Butler (AE) 01273 662018

Matt Adams 01273 662086