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TPR names pension schemes whose trustees failed to complete their basic duties

Ref: PN17-47
Thursday 10 August 2017

Pension trustees of a number of high profile employers have failed to comply with their basic duties, The Pensions Regulator (TPR) has revealed.

TPR today publishes its latest compliance and enforcement quarterly bulletin (PDF, 61kb, 14 pages).

As well as including data on automatic enrolment compliance, for the first time the bulletin includes a link to the names of pension schemes whose trustees have been fined for failing to complete scheme returns or annual chair’s statements.

The schemes of a number of high profile organisations are represented on the list, including national and multinational businesses.

Nicola Parish, TPR’s Executive Director for Frontline Regulation, said:

“It is concerning that the trustees of some schemes, including those of some high profile organisations, are failing to complete some of their most basic legal pension duties.

“We expect trustees to comply with their basic duties including providing information in the scheme return on time. Accurate and up-to-date data is the lifeblood of a regulator and enables us to operate effectively. Non-compliance with basic requirements can also be an indicator of broader governance issues within a scheme.

“We want all members to be saving in well-run schemes and will take action to help schemes get the basics right. Size doesn’t matter – if you breach your duties, you will face action."

TPR’s 21st century trustee programme, including the development of the trustee toolkit is focused on raising the standard of trusteeship.

The bulletin highlights that the majority of schemes complied with new legislation obliging them to prepare an annual governance statement, signed by the chair of trustees. Between April and June this year, the trustees of 20 schemes received a mandatory fine for not preparing a chair’s statement. A large proportion of those failing to produce a statement involved schemes with fewer than 100 members but some were large employers.

In the same period the trustees of a number of schemes failed to submit scheme returns even after receiving a warning from TPR, leading to the issuing of fines to 45 trustees.

TPR has also today published an updated quarterly list of employers taken to court for failing to pay fines for automatic enrolment non-compliance. The employers had each been issued with an escalating penalty notice (EPN) by TPR but had failed to pay it.

The list features both small and multinational companies, with county court judgments secured by TPR for up to £52,500.

The vast majority of employers continue to be compliant with their workplace pension duties. However TPR's website also features an updated list of a small number of employers that continue to ignore their automatic enrolment responsibilities despite having been issued with – and having paid – escalating penalty notices.

TPR will consider taking additional enforcement action against employers who remain non-compliant, including prosecution in appropriate cases in accordance with TPR’s published prosecution policy.

Other data revealed in the compliance and enforcement bulletin includes:

  • a total of 276 inspections were carried out in the quarter, up from the 224 inspections carried out in the previous quarter – the most completed in a single quarter
  • TPR issued 4,794 fixed penalty notices (FPN) of £400 for automatic enrolment non-compliance to employers in the quarter, up from 4,673 the previous quarter – the largest total issued to date
  • a total of 1,384 EPNs were issued in the quarter, up from 1,043 in the first three months of 2017 – this was also the highest quarterly EPN total

Editor's notes

  1. The annual scheme return provides an important source of data and information for TPR. It is how TPR maintains its register of pension schemes and to help it identify pension schemes where there is a potential risk to members’ benefits. We also use this information to calculate annual levy charges and monitor compliance with the chair’s statement and charge controls requirements.
  2. 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).
  3. Occupational schemes providing money purchase benefits are required by law to prepare an annual statement, signed by the chair of the trustees, within seven months of the end of each scheme year. TPR is required by law to issue a fine for failing to provide a chair’s statement. Fines can range from £500 to £2,000.
  4. For automatic enrolment, the lists being published today feature employers who have been given an EPN for failing to comply with automatic enrolment.
  5. The first list includes 18 employers who have been given EPNs for a collective total of more than £40,000, which they have paid. However, despite having paid the EPNs between April and June 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 51 employers who were issued with EPNs for a collective total of more than £425,000. These employers failed to pay their EPNs so TPR secured court orders against them demanding payment. They include both compliant businesses, and non-compliant businesses whose cases are being reviewed over the potential for further action. TPR’s policy is that we will normally name such businesses each quarter, although exceptions may be made on a case by case basis if we believe it is appropriate. In the previous quarter, 13 employers were named after being given CCJs for a collective total of more than £220,000.
  7. More than 690,000 employers have met their workplace pension duties to date, the vast majority of those who have been required to so far. More than 8.3 million staff working for those employers are now saving for their retirement because of automatic enrolment.
  8. However if employers fail to become compliant they could be issued with an FPN for £400. If they continue to be non-compliant they can be issued with an EPN that can increase by up to £10,000 per day until they act.
  9. If employers remain non-compliant with their automatic enrolment duties we may consider taking additional enforcement action against them, including prosecution in appropriate cases in accordance with TPR’s published prosecution policy.
  10. 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

James Glover 01273 662098

Matt Adams 01273 662086

pressoffice@thepensionsregulator.gov.uk

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