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TPR internal criteria

 

FOI reference - FOI-3529

Date - 18 January 2019


Request

a) Please confirm the date on which The Pensions Regulator (TPR) established and/or approved the internal criteria set out in the 29 November letter.

b) Please confirm, in respect of any penalty notice issued under Regulation 28 of the Charges Regulations for non-compliance with Regulations 23 and/or 26 of the Administration Regulations, whether in any case TPR decided to revoke a penalty imposed where (1) none of the five internal criteria were satisfied; and (2) TPR remained of the view that there was non-compliance with Regulations 23 and/or 26 of the Administration Regulations. You subsequently clarified that this question related to all penalty notices issued under Regulation 28 of the Charges Regulations in respect of Chairs' Statements considered to be non-compliant with Regulations 23 and/or 26 of the Administration Regulations (including but not limited to the 74 revocations referred to in the April-June bulletin) and sought confirmation as to whether in any case TPR decided to revoke a penalty imposed where TPR remained of the view that the statement was still non-compliant with Regulations 23 and/or 26 of the Administration Regulations where none of the five internal criteria were satisfied. You also clarified that your request was limited to cases where the criteria existed at the time of the decision to revoke a penalty (and not to any previous revocations).

c) Criteria 2 suggests that, if a trustee sent its chair's statement to TPR more than six weeks before the deadline for completing the chair's statement, this was a factor that might suggest a penalty notice in respect of that statement should be revoked because TPR would have had time to provide feedback on revisions that should be made to the statement. However, unless requested by TPR, there is no obligation for trustees to send TPR their chair's statement at all, whether before or after the deadline for completing it.

i. Please explain the reason for establishing Criteria 2.

ii. In particular, did TPR take the view at the time of establishing the Criteria that:

1 there was significant uncertainty surrounding the requirements under Regulations 23 and/or 26 of the Administration Regulations; and/or

2 trustees should send draft statements to TPR for review before the deadline for completion of the statement?

You subsequently clarified requests (c)(ii)(1) and (2) requesting:

  • provision of any information concerning the consideration by TPR of the inadequacy of guidance available to Master Trusts at the time about the necessary content required to be contained in their Chair's Statement under the Administration Regulations; and
  • confirmation (and/or provision of information relating to) whether it was TPR’s policy that Master Trusts should be entitled to seek guidance from TPR as to the compliance of their Chair's Statement in advance of their Statement being due to be produced. If this was TPR's policy, please provide any information regarding how this was communicated to Master Trusts.

iii. If so, why was this not communicated to our client?

d) Criteria 3, 4 and 5 refer to both an initial chair's statement and a subsequent chair's statement. Please confirm whether the application of Criteria 3, 4 and 5 would lead to the revocation of a fine imposed: (1) only in respect of the initial chair's statement; (2) only in respect of the subsequent chair's statement; or (3) in respect of both the initial and subsequent chair's statements.

e) Please confirm the reason for the selection of the period of two weeks before the deadline for the submission of a chair's statement in each of Criteria 2, 3 and 5.

f) Criteria 4 relates to the period between the provision of a statement to TPR and the penalty being issued, but does not take account of any delay between the completion of the statement and TPR requesting the statement.

i. Please confirm the circumstances in which TPR will ordinarily make a request to trustees that a chair's statement be provided.

ii. Please confirm whether TPR assesses every chair's statement it receives for compliance with the requirements specified in Regulations 23 and/or 26 of the Administration Regulations. You subsequently requested statistics on the number of Chair's Statements received and the number of those statements that have been assessed for compliance with the requirements specified in Regulations 23 and/or 26 of the Administration Regulations i the last three years.

iii. If TPR does not assess every chair's statement it receives for compliance, please confirm the main reasons why it would choose not do so.

Response

I can confirm that we hold some of the information falling within scope of your request.

Information we are able to supply

a) The internal criteria, referred to in Freedom of Information (FOI)-3422 (were approved on 15 June 2018. Please note that following investigation the exact wording of the criteria is:

[Criteria 1] we received the Statement before 31 March 2017 and, given the considerable delay, it is only fair and reasonable to revoke the Penalty Notice on the grounds that it would be procedurally unfair to pursue the fine.

[Criteria 2] you sent us the Statement more than six weeks before the deadline for you to have completed a compliant chair’s statement. During this time we could have given you feedback, and had we done so at least two weeks before the deadline, you could have produced a compliant statement. Since that opportunity was lost because of our delay, we are revoking the Penalty Notice on the grounds that it would be procedurally unfair to pursue it.

[Criteria 3] we sent you a Penalty Notice in relation to a statement for the previous scheme year less than two weeks before the deadline for completing this one. If we had issued the Penalty Notice on the earlier statement at least two weeks before this one was due, you would have had the opportunity to make this one compliant. However, due to our delay, we are revoking the Penalty Notice on the grounds that it would be procedurally unfair to pursue it.

[Criteria 4] of a significant delay of over six months between us receiving the Statement and imposing a penalty and because you have produced one or more statements since you provided us with the Statement on [date]. The delay means that you prepared those subsequent statements without the benefit of our assessment on areas of non-compliance. Had we sent you the Penalty Notice at least two weeks before your next chair’s statement fell due, you would have been able to reflect on our assessment in producing the subsequent one. We therefore concluded that it would be unfair to penalise you because of our delay, and we are revoking the Penalty Notice on the grounds that it would be procedurally unfair to pursue it.

[Criteria 5] you provided an earlier statement which we consider did not comply with the 1996 Regulations, but we did not issue a Penalty Notice in good time about it, and at least two weeks before the Statement was due. We consider that the opportunity to have produced a compliant statement was lost and we are revoking the Penalty Notice on the grounds that it would be procedurally unfair to pursue it.

FOI-3422 will be amended accordingly.

b) TPR has not revoked a penalty notice concerning a chair’s statement regarded as being noncompliant with Regulations 23 and/or 26 of the Administration Regulations in the circumstances you describe.

d) In respect of criteria 3 - (2) applies. In respect of criteria 4 - (1) applies (although in cases where we request the subsequent chair’s statement following the application of criteria 4 to a fine imposed in respect of the first chair’s statement, then criteria 5 would be applied to revoke any fine imposed for that subsequent chair’s statement). In respect of criteria 5 - (2) applies.

f)
(i) The circumstances vary and are assessed on a case by case basis. An example would include if we feel it appropriate to review or investigate a scheme’s governance arrangements.

(ii) No. TPR's current policy is that it only performs this assessment in respect of those statements it requests, apart from in relation to those statements that upon a cursory review are found manifestly deficient.

TPR does not hold statistics on the number of Chair's Statements received and the number of those statements that have been assessed for compliance with the requirements specified in Regulations 23 and/or 26 of the Administration Regulations in the last three years.

(iii) See the first paragraph of (ii) above.

Information we are not able to provide

Section 12 - Exemption where cost of compliance exceeds appropriate limit.

Under section 12 of the Freedom of Information Act (FoIA) public authorities are not obliged to comply with a request for information where the cost of complying would exceed the appropriate limit in the Fees Regulations1, which, for us, is set at £450. Staff costs are fixed at £25 per person per hour. This represents the estimated cost of one person spending 18 hours in determining whether we hold the information, locating, retrieving and extracting it.

In line with section 12 of the FoIA, we are not able to confirm whether the information requested in Ci, Cii, Ciii and E is held. This is because the request does not specify either the type of documents or the time period to search across. As such, the time required to identify all information relevant to your request is estimated to be in excess of the applicable time limit.

You may wish to refer to our FOI request 3402 and the quarterly Compliance and Enforcement bulletin for April to June 2018 for general information about why we established the internal criteria. These can be accessed by the two following links: