TPR warns over failure to complete scheme return
Monday 14 March 2016
The Pensions Regulator (TPR) has warned a number of trustees they could face being fined for failing to complete their scheme return.
In line with its educate and enable approach, TPR provides guidance for trustees on completing the scheme return.
However, TPR is concerned that in defined contribution (DC) schemes, some trustees are not meeting their basic duties by completing the scheme return. Its latest figures show that DC scheme return completion rates have fallen for the second year running, down 18% from January 2014 to January 2016.
As a result, TPR is sending letters to a group of trustees who are in breach of the law to warn them to complete their 2015 scheme return or risk facing a fine.
Andrew Warwick-Thompson, Executive Director for Regulatory Policy at TPR, said: "We are disappointed and concerned that despite the assistance we provide trustees, scheme return completion rates continue to fall at a time when the importance of accurate returns is greater than ever.
"We have been clear with trustees of all schemes that we do expect them to meet their most basic ‘hygiene’ duties, and our goal remains to educate and enable trustees to achieve this.
"Ultimately though we will act if trustees fail to complete their scheme return, which is designed to provide us with information about schemes and those running them so that we can regulate them effectively. This is particularly important in the context of the new governance requirements and charge controls for DC schemes."
TPR will consider publishing details of trustees who have failed to complete their scheme return using its powers under section 89 of the Pensions Act 2004.
- Scheme return information is used to ensure the register of pension schemes, which we are responsible for maintaining, is accurate. It is also used to identify schemes which may present a potential risk to members' benefits and to calculate levies due from the scheme, amongst other uses.
- Trustees and managers of certain occupational and personal pension schemes are required to provide TPR with a scheme return. Trustees or managers of registrable schemes with 12 or more members complete a scheme return annually and those with 2 to 11 members once every three years.
- TPR is writing to a group of trustees who have failed to complete their 2015 scheme return to require them to provide their scheme return within two weeks or risk a fine under section 10 of the Pensions Act 1995. The maximum fine for an individual is £5,000 or £50,000 in any other case.
- The Pensions Regulator is the regulator of work-based pension schemes in the UK. We have objectives to: protect members’ benefits; 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).
Matt Adams 01273 662086