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Compliance and enforcement bulletin January to June 2021

This update provides information about our cases and the powers we have used. It is designed to help employers, their advisers, trustees and administrators understand the type of compliance and enforcement interventions we undertake.

Our approach is based on preventing problems developing in the first place by being clear about our expectations and we have a range of educational materials for all members of our regulated community. These include online resources for employers and their advisers to help them through automatic enrolment (AE), the Trustee toolkit, guidance on scams, and information on other areas including funding and investment, scheme governance and record-keeping.

Selected powers used for frontline regulation

Power Description Number Jan to Mar Number Apr to Jun Number in period Number to Jun 2021
Trustee appointments The power to appoint trustees to schemes (a) to secure that the trustees as a whole have, or exercise, the necessary knowledge and skill for the proper administration of the scheme, (b) to secure the proper use or application of the assets of the scheme, and/or (c) otherwise to protect the interests of the generality of the members of the scheme. 0 0 0 59
The power to appoint trustees to schemes to secure that the number of trustees is sufficient for the proper administration of the scheme under Section 7(3)(b) of the Pensions Act 1995. 71  78  149  3467 
Power to vest or transfer property as a consequence of appointing or removing a trustee under Section 9 of the Pensions Act 1995. 35 
Trustee suspensions The power to suspend a trustee either (a) whilst we are considering making a prohibition order against them, or (b) if proceedings have been issued against them for an offence involving dishonesty or deception, or (c) pending consideration being given to the institution of proceedings for an offence involving dishonesty or deception.
  19 
Power to extend the period of suspension. 0 0 15
Trustee prohibitions Power to make a prohibition order under Section 3 of the Pensions Act 1995. 0 0 0 21
Special Procedure Where TPR considers that there would be an immediate risk to members interests or scheme assets if a warning notice were to be issued. 32 
Mandatory penalty notice The Occupational Pension Schemes (Charges and Governance) Regulations 2015 require us to issue a mandatory penalty where no chair’s statement has been prepared or we are of the opinion that the statement does not comply with the requirements prescribed for a chair’s statement in the Occupational Pension Schemes (Scheme Administration) Regulations 1996. 39  14  53  756 
Scheme return enforcement Trustees have a legal obligation to give us information about their pension scheme by completing a scheme return when required, and an ongoing duty to ensure our records are maintained with up-to-date registrable information. A financial penalty under Section 10 of the Pensions Act 1995 may be imposed for this failing. 235 
Audited accounts enforcement Trustees or scheme managers of most schemes are legally required to obtain audited accounts annually, within seven months of the scheme year end. Failure to do so may result in a financial penalty.
Information gathering   Our formal information gathering powers under Section 72 of the Pensions Act 2004. 24  35  59  866 
Regulatory intervention reports Section 89 of the Pensions Act 2004 gives us the power to publish information on cases where we have exercised or considered exercising our powers. 74
Clearance A statement that we will not use our anti-avoidance powers to issue either contribution notices or financial support directions, or both* in relation to a defined benefit occupational pension scheme. *The power is executed twice 67 
Inspection and warrants Statutory inspection powers under Sections 73 to 78 of the Pensions Act 2004.
Production order A High Court Order under Section 345 of the Proceeds of Crime Act 2002 requiring the production of specified material. 11  68 
Provision of information by interested party. Section 18(A) Proceeds of Crime Act 2002.
Confiscation order A Crown Court Order under s6(1) Proceeds of Crime Act 2002, requiring a convicted defendant pay a sum of money representing the benefit from their offending.
Restitution order A High Court Order under Section 16 of the Pensions Act 2004 requiring a person to put right a misuse or misappropriation of pension scheme assets in which they were involved.
Restraint order A High Court Order under Section 41(1) of the Proceeds of Crime Act 2002 requiring the restraint of assets.
Criminal Fraud by Abuse of Position under Section 4 of the Fraud Act 2006.
Restriction on Employer Related Investments under Section 40 of the Pensions Act 1995.
Improvement/third party notice Notices containing directions for a person to take steps to enable compliance with pensions legislation or remedy any non-compliance. 17 
Regulated apportionment arrangement (RAA) The application, subject to conditions, to separate a scheme from its employer. It must be approved by us and the PPF must confirm that they do not object to the RAA.
Master trusts Master trusts authorised under Section 13 of the Pension Schemes Act 2017.  38 
Other Various other powers. 173 
Total  149  137  286  5,981

Review of statutory notices for frontline regulation

If a trustee or other recipient disagrees with the issuing of a Statutory Notice issued under the 2015 Regulations – for example for failing to prepare a chair’s statement or exceeding the charge cap – they can apply for a ‘review’ of that decision. We set out the right of review in all notices, as well as how to apply for a review. An application for a review must be made within 28 days from when the notice was first issued.

We appoint a review officer, who is someone not previously involved with the case, to carry out the review. We will usually complete the review within 10 working days of the written notification that the application has been accepted and that a review will be carried out. If this is not possible, we will contact the applicant(s) and let them know when they can expect us to make a decision.

Reviews Number in period  Number to June 2021
 Requested 4 155
 Completed 1 151

Outcome of reviews Number in period Number to June 2021
 Confirmed 0 31
 Revoked, substituted or varied 1 109

Automatic enrolment

Automatic enrolment cases closed in the period

Cases closed in this quarter: 24,552

Cases closed to date[1]: 424,122

Selected powers used in the period

Power Number Jan to Mar Number Apri to Jun Number in period Number to December 2020
 Information Notice 39  35  74 1,793 
 Inspection 0 1,869 
 Warrant
 Compliance Notice 22,099  12,988  35,087 263,728 
 Unpaid Contributions Notice 4,828  7,093  11,921 80,892 
 Fixed Penalty Notice 10,725  11,817  22,542  149,072 
 Escalating Penalty Notice 2,416  4,991  7,407  46,937 
 Total 40,107  36,925  77,032 544,295

Review of statutory notices for automatic enrolment

A review is where an employer who is the recipient of a statutory notice (such as a Compliance Notice, Fixed Penalty Notice or Escalating Penalty Notice) disagrees with our decision and requests a review.

Confirmed reviews are where we have carried out a review and decided that the statutory notice was issued correctly and appropriately and will continue to be applied to the employer.

In some cases, we revoke the statutory notice following the review. Where a notice is substituted, this may mean that a different breach has been uncovered and a different statutory power is used instead.

ReviewsNumber Jan to MarNumber Apr to JunNumber in periodNumber to December 2020
Requested 3,147  4,212  7,359 49,440
Completed 2,079  2,842  4,921 34,920

Outcome of reviews Number Jan to Mar Number Apr to Jun Number in period Number to Jun 2021
Confirmed 344 500  844 11,112 
Revoked, substituted or varied 1,735  2,342  4,077 30,257 

Tribunals for automatic enrolment

Employers who receive a penalty notice and disagree with our decision to issue it must first ask us for a review. If they disagree with the outcome of that review they can then appeal the decision to the Tribunal Service. Employers have 28 days after the review decision is issued in which to appeal.

Tribunals Number Jan to Mar Number Apr to Jun Number in period Number to Jun 2021
Requested 96  68  164 1,922 
Defended 22  15  37 1,070 
Not defended  73  43  116 850 

Outcome of defended tribunals Number Jan to Mar Number Apr to Jun Number in period Number to Jun 2021
Confirmed[2] 34  2 1,007 
Revoked, substituted or varied  62 
Total 35  42  1,069 

Ongoing tribunals where the decision has yet to be made on how to respond: 11

Defended tribunals still ongoing at the end of June 2021: 15

Footnotes

[1] We define ‘to date’ as the period commencing from the outset of our compliance and enforcement activity for automatic enrolment (July 2012), and continuing all the way to the end of this reporting period (ie 30 June 2021). We occasionally identify a small number of cases which have been incorrectly marked as relating to automatic enrolment. When this occurs, an adjustment to the numbers from the previous quarter will have been made.

[2] Confirmed includes Struck out, Dismissed, plus Withdrawn

Online list of employer and trustee fines

We publish the total amount in penalties for:

  • not completing a scheme return
  • remaining non-compliant after paying an EPN
  • an unpaid EPN leading to a CCJ

We publish enough information to identify:

  • the name and area of those who have been fined
  • the amount they need to pay to us

For a list of employer and trustee fines please see penalty notices.