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Compliance and enforcement quarterly bulletin January to March 2020

This quarterly 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 in period Number to March 2020
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 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. 91 3098
Power to vest or transfer property as a consequence of appointing or removing a trustee under section 9 of the Pensions Act 1995. 0 31
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. 0 17
Power to extend the period of suspension 0 14
Trustee prohibitions Power to make a prohibition order under section 3 of the Pensions Act 1995. 0 19
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. 0 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. 52 672
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. 3 234
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. 0 4
Information gathering Our formal information gathering powers under section 72 of the Pensions Act 2004. 11 748

Power Description Number in period Number to March 2020
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. 1 62
Clearance A statement that we will not use our anti-avoidance powers to issue either contribution notices or financial support directions in relation to a defined benefit occupational pension scheme. 4 61
Inspection and warrants Statutory inspection powers under sections 73 to 78 of the Pensions Act 2004. 0 6
Production order A High Court Order under section 345 of the Proceeds of Crime Act 2002 requiring the production of specified material 3 31
Provision of information by interested party. Section 18(A) Proceeds of Crime Act 2002. 0 4
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. 0 4
Restraint order A High Court Order under section 41(1) of the Proceeds of Crime Act 2002 requiring the restraint of assets. 1 3
Criminal Fraud by Abuse of Position under section 4 of the Fraud Act 2006. 0 5
Restriction on Employer Related Investments under section 40 of the Pensions Act 1995 0 2
Improvement/third party notice Notices containing directions for a person to take steps to enable compliance with pensions legislation or remedy any non-compliance. 0 17
Regulated apportionment arrangement 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. 0 7
Master trusts Master trusts authorised under section 13 of the Pension Schemes Act 2017 0 38
Other Various other powers 4 151
Total 167 5316

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 March 2020
Requested 1 144
Completed 5 143

 

Outcome of reviews Number in period Number to March 2020
Confirmed 1 31
Revoked, substituted or varied 1 101

Automatic enrolment

Cases closed

Automatic enrolment cases closed in the period
Cases closed in this quarter 29,730
Cases closed to date1 367,314

 

Selected powers used in the period

Power Number in period Number to Mar 20
Information Notice 111 1,585
Inspection 37 1,865
Warrant 0 4
Compliance Notice 11,132 190,562
Unpaid Contributions Notice 10,410 65,457
Fixed Penalty Notice 9,913 115,459
Escalating Penalty Notice 3,571 35,717
Total 35,174 410,649

 

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.

 

Review of statutory notices

Reviews Number in period Number to Mar 20
Requested 3,495 47,065
Completed 2,520 32,678

 

Outcome of reviews Number in period Number to Mar 20
Confirmed 756 9,397
Revoked, substituted or varied 1,764 23,281

 

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 in period Number to Mar 20
Requested 98 1,838
Defended 22 1,067
Not defended 53 747

 

Outcome of defended tribunals Number in period Number to Mar 20
Confirmed 44 983
Revoked, substituted or varied 1 59
Total 45 1,042

NB. Confirmed includes struck out, dismissed, plus withdrawn

Ongoing tribunals where the decision has yet to be made on how to respond 24
Defended tribunals still ongoing at the end of March 2020 25

 

Online list of employer and trustee fines

We publish details of those who have received penalties either for:

  •   not completing a chair’s statement on time
  •  „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

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 31 March 2020). 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.