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Prosecution report and latest enforcement data show TPR is protecting savers

Ref: PN23-06

Issued: Wednesday 22 March 2023

A new report published today demonstrates the robust enforcement action The Pensions Regulator will take to protect savers in pension schemes of all sizes, including against individuals.

In a Regulatory Intervention Report (RIR), TPR explains how it used its powers to prosecute two former pension scheme trustees for making illegal loans of £236,000 from a company pension scheme to the sponsoring employer.

The report comes as TPR also publishes its latest  Compliance and Enforcement Bulletin which shows how many times the regulator has used its powers to protect savers between July and December 2022, including in relation to automatic enrolment.

Today’s RIR highlights how company directors Andrew Kyprianou, 60, and Colin Werb, 72, pleaded guilty to two counts of prohibited employer-related investments (ERI) when appearing at Leeds Crown Court on 17 August 2022. They were sentenced to 16 months’ imprisonment, suspended for two years, and given 250 hours of community work each.

Kyprianou and Werb were trustees of a defined benefit (DB) pension scheme called the Eastman Machine Company Limited Superannuation Scheme, but were also directors of Eastman Staples Limited, the employer sponsoring the scheme.

At the time the offences took place, the scheme had 19 members and approximately £1.67 million invested.

The report follows new guidance issued by TPR earlier this month which reminds all trustees of their ERI duties, setting out the restrictions and the responsibilities that apply. Making a loan from a pension scheme to the scheme’s employer is a criminal offence and a trustee who agrees to do this can be sentenced to up to two years’ imprisonment and an unlimited fine.

Director of Enforcement, Erica Carroll, said:

“Our case report, together with our new guidance, should serve as a clear reminder to all trustees that we will prosecute those who ignore the rules around employer-related investments.

“Where we suspect ERI breaches, we investigate fully and persistently, and take firm action against those who flout the rules, no matter the size of the scheme. I call on all those involved in running pension schemes to therefore ensure they are following our guidance.”

Ensuring all savers are protected

TPR’s latest Compliance and Enforcement Bulletin shows that between July and December 2022, in respect of its automatic enrolment powers, the regulator issued:

  • 28,027 Compliance Notices compared to 20,382 in the previous period
  • 17,962 Unpaid Contribution Notices compared to 13,604 in the previous period
  • 18,897 Fixed Penalty Notices compared to 15,302 in the previous period
  • 7,492 Escalating Penalty Notices compared to 5,918 in the previous period

As the successful rollout of automatic enrolment continues, more than 2.1m employers have met their automatic enrolment duties. The number of employers due to redeclare their compliance increased by 106%* in the second half of 2022 compared with the preceding period (December 2021 to May 2022) – a trend which is expected to continue over the next 12 months.

Director of Automatic Enrolment, Mel Charles, said:

“We have seen an overall increase of around a third in our use of AE powers during the six months to December 2022, compared to the previous six months. This is in line with our expectations, owing to a large wave of small and micro employers who were due to redeclare in that period.

“The majority of employers are doing the right thing for their staff despite challenging economic circumstances. However, for the small minority who fail to comply with their workplace pension duties, this bulletin demonstrates the enforcement action we take, where necessary, to protect savers.

“I’m pleased to see that the volume of fines issued as a percentage of all declarations completed during July to December fell compared to the previous six months, which indicates our compliance work is effective at putting problems right before they escalate.”

In respect of the use of TPR’s frontline regulation powers, the total number of statutory powers used was 215 compared to 203 in the previous six-month period.

Notes to editors

  • Between June and November 2022, 179,553 employers were due to redeclare compared with 87,153 in the preceding period (December 2021 to May 2022), which represents a 106.02% increase.
  • An employer must make a declaration of compliance within five months of the start of their legal auto-enrolment duties and has a legal duty to redeclare their compliance every three years.
  • The C&E Bulletin is published every six months to evidence the compliance and enforcement interventions The Pensions Regulator has undertaken to protect savers.
  • 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 the regulator’s functions under Part 3 of the Pensions Act 2004 only). 

Press contacts

Jackie Stevens

Media Officer
01273 349597

Out of hours

This is for journalists only with a media enquiry. The below number will divert to our on call media officer.
01273 648496

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