TPR continues tougher approach and fines more trustees
Tuesday 25 October 2016
The Pensions Regulator (TPR) has repeated its warning to trustees of defined contribution (DC) schemes to comply with pensions law or face a fine.
The alert comes after the trustees of two schemes - New Station Bodyworks Ltd Retirement Benefit Scheme and M Holleran Ltd Pension Plan - were ordered to pay a fine for failing to provide a scheme return. TPR has issued a regulatory intervention report (PDF, 178kb, 4 pages) about the action taken.
The trustees or managers of registrable schemes are required by law to provide TPR with a scheme return.
It provides vital information on schemes and is a basic administrative requirement of any trustee. It also allows trustees to confirm that they are complying with new DC governance standards.
Nicola Parish, Executive Director for Frontline Regulation at TPR, said: “Providing information to TPR is an essential part of a trustee’s role and they are required by law to submit a scheme return and update their registrable information.
"We are supporting trustees in numerous ways, including new web guidance and news-by-email to help them understand how to complete the new scheme return in order to demonstrate they are meeting new governance standards.
"However, schemes should be aware that this type of breach will result in a fine and we hope that our latest intervention report will act as a reminder to all trustees to ensure they complete a scheme return on time. We will act where trustees demonstrate that they are not complying even with the basic duties.”
The current number of warning notices issued for the failure to submit a scheme return by the due date stands at 23.
- The financial penalty is against each trustee or manager who may not be reimbursed or indemnified from the scheme assets.
- The scheme return is how we capture information about pension schemes to maintain our register of pension schemes and to help us identify pension schemes where there’s a potential risk to members’ benefits. We also use this information to calculate annual levy charges and monitor compliance with the Chair Statement and Charge Controls requirements.
- TPR issues warning notices to trustees and managers that have failed to comply with their legal duty to provide a scheme return to us by the required date. A warning notice will indicate that TPR will impose a financial penalty against the trustee(s) or manager, unless they provide their scheme return by a certain date.
- There is a discretionary penalty for failing to provide a scheme return, and we can impose a maximum fine of £5,000 for each individual trustee and up to £50,000 in other cases (eg corporate trustees).
- The Pensions Regulator 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