NOW: Pensions Ltd (NPL) and NOW: Pension Trustee Ltd (NPTL) have each been given penalties of £50,000 for failing to correctly report significant events and breaches of law to The Pensions Regulator (TPR).
The significant event regime required NPL and NPTL to report to TPR 'as soon as reasonably practicable' any failure of systems or processes used in running the master trust which had a significant adverse effect on service delivery. Generally, this report should be provided within one working day.
However, in this case, historic failures, which led to more than 80,000 statutory communications not being sent, were not reported as significant events to TPR.
NPL and NPTL reported two of the same communication failures as breaches of law, however, they failed to do so as soon as reasonably practicable.
The communications, which were not delivered to scheme members and potential members, were to inform them of their rights under auto enrolment legislation.
These individuals suffered non-financial and, in some cases, financial detriment by being denied the opportunity to make choices over their auto-enrolment options.
Gaucho Rasmussen, Executive Director of Regulatory Compliance at TPR, said: “The master trust authorisation regime created a safer more robust and sustainable market for the millions who save into these schemes. And, as this case proves, when things go wrong, we will take tough action to protect savers.
“NOW has since satisfied us it has made changes to enhance its processes around reporting so TPR can continue to manage risks effectively, ensuring the security and quality of the scheme for its members.”
Today, TPR has published a regulatory intervention report explaining how it used its powers following the decision of its Determination Panel to do so.
To protect savers’ interests and enhance retirement outcomes, TPR has adopted a prudential style of regulation to enable it to manage risks at individual and systemic levels, particularly for master trusts.
It has also evolved its supervisory approach to master trusts which, according to official statistics, provide for the majority of trust-based DC pension savers with 28 million memberships (91% of non-micro DC and hybrid schemes) and £166 billion in assets (81% of DC schemes assets). The new approach will allow TPR to identify market and saver risks sooner to enhance the pensions system.
Notes for editors
- Reporting significant events allows TPR to manage risks effectively, ensuring the security and quality of a master trust for its members. When such events occur, TPR will work to understand its impact and how it is being managed to ensure the master trust continues to meet the authorisation criteria and savers are protected. If these events are not reported, TPR will consider the use of its available enforcement powers to ensure savers are protected.
- TPR investigated failures to report three significant events and two breaches of law as soon as reasonably practicable. The three significant events constituted a failure of the systems and processes used in running the scheme which had a significant adverse effect on service delivery (regulation 14(j) Occupational Pension Schemes (Master Trusts) Regulations 2018).
- In February, TPR announced it would evolve its oversight of master trusts with a sharper focus on member outcomes.
- TPR is the regulator of work-based pension schemes in the UK. Our statutory objectives are to:
- protect members’ benefits
- reduce the risk of calls on the Pension Protection Fund
- promote, and improve understanding of, the good administration of work-based pension schemes
- maximise employer compliance with automatic enrolment duties
- 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)
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