The Pensions Regulator (TPR) has given the trustee and trust manager of NOW: Pensions a deadline to fix long-running issues with the pension scheme.
TPR has required the master trust to act to resolve persistent administrative failings, over a number of years, which have led to some scheme members’ savings not being collected from employers and invested.
TPR has fined the trustee (NOW: Pension Trustee Limited) a total of £70,000 for its failings and has issued it with an Improvement Notice. A related notice, called a Third Party Notice, has been issued to the trust manager (NOW: Pensions Ltd, or NPL).
The notices direct that the trustee and NPL must complete a series of steps to rectify their failure to remedy the administrative issues. These steps must be taken by specified deadlines over a number of weeks and months. Both the trustee and NPL have indicated that they are prioritising resolving these issues.
The trustee has assured TPR that there is no risk to any of the funds that NOW: Pensions has collected on behalf of members. The trustee and NPL have also agreed to set up a scheme of compensation for members who have been affected.
The issuing of the notices and the fines are part of a package of measures TPR has used to ensure that NPL and the trustee tackle the issues.
In February 2017, with the consent of the trustee, TPR required the trustee to commission an independent skilled person’s report into the scheme’s ongoing issues. Following the issue of the report in June 2017, TPR continued to engage with NPL and the trustee to ensure steps were taken to address the shortcomings identified.
As part of this engagement, TPR welcomed the trustees’ decision to voluntarily withdraw from the master trust assurance list in July 2017. TPR was also pleased by the trustee and NPL’s decision to appoint an independent trustee, Dalriada, to the trustee board in October 2017 to assist with driving the improvements required.
TPR issued the Improvement Notice and Third Party Notice, to ensure that the trustee and NPL take key steps to resolve the issues by set deadlines. If, without good reason, the steps are not completed on time, they could be fined again.
TPR fined the trustee £50,000 in November 2017 for failing to ensure that all employee and employer contributions were collected and invested promptly over the period from 6 April 2015 to 8 August 2017, and a further £20,000 in January 2018 for failing to keep some members properly informed.
Nicola Parish, TPR’s Executive Director of Frontline Regulation, said: “This package of measures, together with those voluntarily taken by the trustee, should ensure that the issues with NOW: Pensions which have persisted for so long are finally resolved.
“We will continue to monitor progress and will issue further fines if necessary to ensure that the trustee and NPL focus on resolving the issues as swiftly as possible.
“Trustees, sponsors and administrators should be in no doubt that we will act if we are concerned about the way schemes are being run.”
- Section 13 of the Pensions Act 2004 gives TPR the power to issue an improvement notice to persons (typically the trustees or managers of pension schemes) who are in breach of obligations under pensions law. The notice orders those named to take specific action. Section 14 of the Act gives TPR the power to issue an equivalent notice, called a third party notice, to any third party whose actions contribute to (but do not themselves constitute) a breach of pensions law.
- In this case, the notices direct that NPL (the scheme’s trust manager) and the trustee must complete a number of steps by specific deadlines over the period to July 2018. These include clearing the backlog of pension contributions that have not been collected or invested as a result of administrative issues, introducing new internal processes to prevent similar situations from occurring in the future, and agreeing a scheme of compensation for affected members.
- If there is an unreasonable failure on the part of the trustee and NPL to satisfactorily complete any of these actions, TPR has the power to impose fines.
- The fines already imposed on the trustee are i) a £50,000 penalty under Regulation 28 of the Occupational Pension Schemes (Charges and Governance) Regulations 2015 for a failure to ensure financial transactions are processed promptly and accurately as required by Regulation 24 of the Occupational Pension Schemes (Scheme Administration) Regulations 1996, and ii) a £20,000 fine under section 10 of the Pensions Act 1995 imposed by the Determinations Panel for a failure to report to members some late payments as required by section 49(9) and section 88(1) of the Pensions Act 1995.
- In July 2017, NOW: Pensions removed itself from the master trust assurance list, following discussions with TPR about its ongoing issues.
- In October 2017, the trustee appointed Dalriada to its trustee board as an independent trustee director, again following discussions with TPR.
- 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).