The Pensions Regulator (TPR) has been given access to bank statements for the first time in its history, as part of an investigation into pension fraud.
In its quarterly compliance and enforcement bulletin published today (17 August), the watchdog said a number of new powers have been used by TPR’s case teams dealing with pension scams, scheme valuations and automatic enrolment.
The regulator used a so-called production order under the Proceeds of Crime Act 2002, which requires institutions to hand over admissible financial information on individuals or organisations.
In one case, a bank was required "to hand over evidentially admissible statements and other details of the accounts linked to the trustees of a pension scheme as part of an ongoing criminal investigation," TPR said.
The regulator has started issuing the production orders in addition to its s.72 information gathering power.
TPR said it has applied to the court for production orders in cases where it is "investigating fraud and money laundering offences with a view to prosecution.
"We have obtained five production orders so far in the course of our investigations," it added.
TPR has intensified its work on tackling pension scams, and has recently launched an advertising campaign with the Financial Conduct Authority (FCA) to raise awareness of this matter, as it was reported victims lost an average of £91,000 each last year.
Another first for the regulator was the use of its power under section 10 of the Pensions Act 1995, under which it issued a £25,000 fine to a trustee that had failed to complete a valuation of its defined benefit pension scheme.
The trustees of the scheme – with about 140 members and closed to future accrual - failed to provide a scheme valuation in over five years, giving a merger of two schemes as a reason for the delay.
TPR said it had "repeatedly told the trustee that the proposed merger was not a valid reason for failing to comply with the statutory requirements, and they should progress with agreeing both valuations with the employer.
"When the proposed merger failed to happen and the valuations had not been submitted by the end of 2017 as agreed by the trustee, we decided to take formal action."
Between April and June, the watchdog also prosecuted offences under the Computer Misuse Act 1990 for the first time.
Senior staff at Workchain, a national recruitment agency, impersonated their temporary workers to opt them out of their workplace pension scheme.
According to the regulator, the firm's owners and directors, Phil Tong and Adam Hinkley, encouraged five senior staff at the company to get the temporary workers out of the scheme, so the company could avoid making pension payments on their behalf.
Financial controller Hannah Armson, HR and compliance officer Lisa Neal and branch managers Martin West, Robert Tomlinson and Andrew Thorpe then worked together to opt workers out of the National Employment Savings Trust (Nest) pension scheme using its online system, the watchdog said.
All of the defendants pleaded guilty to the offence when they appeared at Derby Magistrates’ Court in June.
Specifically on auto-enrolment, TPR used a total of 43,700 enforcement powers in the second quarter of 2018, which compares to 35,862 in the previous quarter.
Some 12,220 fixed penalty notices were issued in the quarter, a 9.5 per cent increase, alongside 27,219 compliance notices – the most in any three-month period and an average of one every five minutes.
A fixed penalty notice of £400 is issued to an employer for failure to comply with a statutory notice or some specific employer duties.
Nicola Parish, TPR’s executive director of frontline regulation, argued that the regulator’s actions over the quarter demonstrate how it is continuing to develop itself "as an organisation to be clearer, quicker and tougher".
She said: "We’re using powers for the first time and working closely with other organisations to better protect members of pension schemes."
maria.espadinha@ft.com
