Auto-enrolment 

Regulator issues 14,000 penalty notices

Regulator issues 14,000 penalty notices

The Pensions Regulator (TPR) has warned that it is increasingly using its compliance and enforcement powers, having issued almost 14,000 penalty notices during the first three months of 2018.

Due to the expected high volume of employers who reached their auto-enrolment staging date last autumn, the number of times the regulator used its powers in this quarter makes up 20 per cent of all the powers used since the start of government’s pension policy on workplace pensions, in 2012.

The watchdog issued 11,156 fixed penalty notices between January and March 2018 – up from 7,435 in the previous quarter.

A fixed penalty notice of £400 is issued to an employer for failure to comply with a statutory notice or some specific employer duties.

The regulator also issued 2,770 escalating penalty notices - which varies between £50 and £10,000 a day depending on size of the company, and is issued after if the employer still hasn’t complied – an increase from 1,440 in the previous period.

Overall, TPR used its powers more than 35,862 times during the first three months of 2018, up from 28,446 in the previous quarter.

The regulator’s quarterly bulletin also outlines the case of a global company which agreed to pay £3m into its defined benefit (DB) pension scheme after TPR opened an anti-avoidance investigation, due to concerns that members’ pensions were being put at risk.

In addition, the watchdog also used a number of its powers for the first time in the quarter.

These included obtaining a court order requiring four scammers to pay back money taken from a pension scheme under section 16 of the Pensions Act; fining a professional trustee for failing to maintain registerable information and governance and administration rules against schemes 62 times between January and March.

According to Nicola Parish, TPR’s executive director of frontline regulation, the watchdog is “working to be a clearer, quicker and tougher regulator”.

She said: “Very often, being clear that we are fully prepared to use our powers gets employers and trustees to the table and means members are safeguarded more quickly.

“Several cases are resolved thanks to clear and robust negotiation by our case teams and the early engagement of companies and trustees.”

Kate Smith, head of pensions at Aegon, argued that "at last TPR is stepping up and using its authority to take a firm stance on those who fail to comply with the law or scam pension savers".

She said: "For the first time, the regulator is using its new powers to force scammers to pay back money they had taken from pension schemes. We’re expecting the regulator to flex its muscles more often and use all its powers to seek justice."

She added that the quarterly report "is a clear signal that the regulator is no longer a soft touch and sends out a clear message that failure to comply will simply not be tolerated".

She said: "It should be highly reassuring to employees that TPR is using its powers to ensure employers meet their auto-enrolment duties.

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