The Pensions Regulator (TPR) is being urged to disclose the result of whistleblowing notifications it receives, as a consultant firm has accused the watchdog of inaction.
First Actuarial is asking the government to mandate the watchdog to respond to all whistleblowing notifications, "indicating its proposed action or reasons for its inaction".
In its submission to the Work & Pensions select committee inquiry on the defined benefit white paper, the actuarial firm said their experience “is that often when issues of real concern are notified to the regulator, no action is taken”.
“Our ability as advisers to do anything more than re-report is limited,” it added.
HiIary Salt, senior actuary at First Actuarial, said the consultant has reported a case "where the employer is clearly fairly weak", and the company failed to pay their contributions to its defined benefit scheme in December last year.
She said: “That is a case where we think the regulator should be very concerned, and we get frustrated that we will make a whistleblowing notification in a case like that, and nothing will happen.
“All we can do is report it again. They don't come back to us.”
The quantity of whistleblowing notifications to the regulator has been increasing.
According to data revealed in a Freedom of Information request, the watchdog received 2,545 reports in 2015, up from 1,968 in 2014.
Regarding auto-enrolment, The Pensions Regulator revealed recently that it is currently receiving more than 80 reports every week from people who suspect employers are breaking the law on workplace pensions.
According to the principles set out in the watchdog’s code, The Pensions Regulator is a risk-based regulator that must carry its activities in a way which is proportionate, accountable, transparent, consistent and targeted.
In this context, whistleblowing disclosures help the watchdog to inform its intelligence and enforcement action and it takes action where it sees it to be appropriate.
The Pensions Regulator declined to comment on details about its whistleblowing investigations.
Other regulators, such as the Financial Conduct Authority (FCA), are increasing the resources it allocates to managing and handling complaints from whistleblowers.
Earlier this month, Christopher Wollard, director of strategy and competition at the FCA, said “the reality is whistleblowers provide some of the best intelligence we get as an organisation".
Mike Lacey, partner at Berkshire-based financial adviser firm Bowman Pension Consulting, argued there is “a potential danger from individuals’ whistleblowing for malicious, and not altruistic reasons”.
He said: “If The Pensions Regulator replies giving reasons for inaction, it would be possible for a malicious complainant to adjust their allegations accordingly.”
Mr Lacey would prefer two alternatives.
He said: “First, a redacted version of the complaint and its outcome be published, which could lead to other, corroborating complainants coming forward.
“Second, differentiate between direct allegations, and those issued via a third party such as the scheme adviser, provider or actuary (if appropriate).
“It would be obvious to that intermediary if the complainant changed their line of disclosure. The downside of this is that it could make a potential whistleblower reluctant to disclose to an interested party.”
In any case, Mr Lacey agrees that having no feedback isn’t the solution.
He said: “How would a whistleblower know that their complaint had been properly investigated?"
maria.espadinha@ft.com
