Personal Pension  

Regulator warns of fines for scheme return failures

Regulator warns of fines for scheme return failures

Today (14 March) the Pensions Regulator has warned a number of trustees they could be fined for failing to complete their scheme returns.

The regulator said it is concerned in defined contribution schemes some trustees are not meeting their basic duties by completing the scheme return.

Moreover, its latest figures show that DC scheme returns have fallen for the second year running, down 18 per cent from January 2014 to January 2016.

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The Pensions Regulator is sending out letters to a group of trustees who are in breach of the law to warn them to complete their 2015 scheme return or risk facing a fine.

The regulator said it will consider publishing details of trustees who have failed to complete their scheme return using its powers under section 89 of the Pensions Act 2004.

Andrew Warwick-Thompson, executive director for regulatory policy at TPR, said: “We are disappointed and concerned that despite the assistance we provide trustees, scheme return completion rates continue to fall at a time when the importance of accurate returns is greater than ever.

“We have been clear with trustees of all schemes that we do expect them to meet their most basic ‘hygiene’ duties, and our goal remains to educate and enable trustees to achieve this.

“Ultimately though we will act if trustees fail to complete their scheme return, which is designed to provide us with information about schemes and those running them so that we can regulate them effectively.

“This is particularly important in the context of the new governance requirements and charge controls for DC schemes.”

Colin Rodger, director at Edinburgh and Glasgow-based Alexander Sloan Financial Planning, said that since 6 April 2015 trustees of DC schemes have had to meet new governance standards and charge controls such as the cap on annual management fees.

He said: “TPR I think is looking to get information through the scheme returns on how these are being implemented, and so is having a push on getting the completion rate improved.

“TPR provides a lot of help and guidance on completing the return on its website, so its tone has hardened a little as it takes the view that there is no excuse for not doing it.”