A healthcare company and its managing director have been ordered to pay more than £20,000 after they admitted misleading The Pensions Regulator (TPR) about providing their staff with a workplace pension.
Birmingham-based Crest Healthcare and managing director Sheila Aluko each pleaded guilty to one charge of knowingly or recklessly providing false or misleading information to TPR and two counts of wilfully failing to comply with their automatic enrolment duties when they appeared at Brighton Magistrates’ Court on 7 March.
A whistleblower prompted the investigation into Crest Healthcare after contacting TPR to complain that workers at the company suspected that they had been misled into falsely believing that their pension scheme was up and running. Contributions were being taken from the pay packets of the workers but Crest Healthcare would not give them information about their scheme.
Sentencing the company and Aluko at Brighton Magistrates' Court today (15 May 2018), District Judge Teresa Szagun said that it was important to show that individuals and companies did not benefit from avoiding their automatic enrolment responsibilities.
The judge said Aluko “must, as an intelligent businesswoman, have appreciated the obligations on her and also the intent of automatic enrolment” and said her response to the requests of the whistleblower was “dismissive”.
She said: “The need to deter this type of offending requires a penalty proportionate with the seriousness of the offence.”
Judge Szagun fined Crest Healthcare £13,000 and ordered the company to pay £3,404 costs and a £120 victim surcharge. She fined Sheila Aluko £1,624 and ordered her to pay £3,404 costs and a £120 victim surcharge.
Darren Ryder, TPR’s Director of Automatic Enrolment, said:
“Whistleblowers have a vital role to play in helping us ensure workers are getting the pensions they are entitled to.
“The whistleblower in this case highlighted that workers who asked Sheila Aluko about their pensions were being fobbed off with the false claim that they had been automatically enrolled.? When we investigated, Aluko's story unravelled.
“I would urge anyone who believes their employer is breaching its automatic enrolment duties to contact us.
“We will not tolerate non-compliance and, as this case shows, neither will the courts.”
For more information about whistleblowing visit report concerns about your workplace pension. TPR has a dedicated email service for whistleblowers. To report your concerns about a pension scheme email firstname.lastname@example.org.
Read our blog on blowing the whistle on the secret pension offenders.
1. Knowingly providing false information to TPR is an offence under section 80 of the Pensions Act 2004. Wilfully failing to comply with automatic enrolment duties is an offence under section 45 of the Pensions Act 2008.
2. Both charges carry a maximum sentence in a magistrates’ court of an unlimited fine.
3. On 22 March 2016, Sheila Aluko submitted a declaration of compliance to TPR claiming that the employer had complied with its duties. She claimed staff had been written to about the pension scheme and said 25 staff had been enrolled into a workplace pension scheme. In fact, the employer had not completed the setting up of a pension scheme, had not automatically enrolled any staff and had not written to its staff to tell them about automatic enrolment, as it was legally bound to do. No pension contributions had been paid.
4. Later the employer began deducting pension contributions from the wages of some workers but kept them in the company’s bank account and did not pay them into a pension scheme for more than eight months.
5. It was only after TPR had executed a search warrant at Crest Healthcare’s offices and interviewed Sheila Aluko under caution that the pension scheme was set up and the contributions were paid in.
6. 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 TPR’s functions under Part 3 of the Pensions Act 2004 only).