Regulator finds pension breaches in majority of spot checks

Regulator finds pension breaches in majority of spot checks

The Pensions Regulator has found breaches of pensions legislation in 74 per cent of auto-enrolment spot-checks conducted this year, it revealed.

Some 76 per cent of these resulted in enforcement action, The Pensions Regulator stated in its auto-enrolment April 2018-March 2019 report, published today (October 24).

The watchdog said it would continue to carry out country-wide inspections targeted at employers where its data and intelligence teams identified a risk of non-compliance.

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This came after TPR announced a series of short-notice inspections in May.

TPR compares its data with information given by companies to HM Revenue & Customs to pinpoint employers who are suspected of breaking the law.

In particular, the watchdog looks for firms who fail to put staff into a pension scheme or who make no, or incorrect, pension contributions.

In about 40 per cent of cases where a breach was found to have occurred the watchdog needed to use enforcement powers to secure compliance, equating to 743 cases, it said.

The regulator noted however, that it does not always need to use its formal powers to achieve compliance. Sometimes a simple reminder may prompt firms to comply.

During the 2018/19 financial year, TPR received 6,963 whistleblowing reports that fell within its remit

TPR took action in 794 of these reports, with the majority of cases relating to a suspected breach of auto-enrolment duties or contributions. In 196 of the instances formal action was taken, it said.

Overall, TPR used its formal powers 128,807 times during 2018/19 compared with 102,497 times in the previous year.

The regulator’s report also showed that more young people in their twenties were now saving into a workplace pension, with 84 per cent of 22 to 29-year-old individuals making contributions in 2018, which compared with 24 per cent in 2012.

TPR’s data showed that workplace saving among non-eligible staff had nearly doubled, with numbers of staff asking their employer to join a scheme increasing from 16 per cent in 2012/13 to 30 per cent in 2017/18.

The annual amount saved by eligible savers was £90.4bn in 2018 - an increase of £16.8bn on the total amount saved in 2012, and an increase of £7bn on 2017.

Guy Opperman, minister for Pensions and Financial Inclusion, said it was great to see a whole new generation of workers in big and small businesses putting money away and planning for a more secure future.

He said: “The progress we’ve made towards eliminating the gender gap in pension saving is hugely encouraging.

“Automatic enrolment has transformed pension saving and boosted the retirement prospects of millions of people, and we’ll make sure that even more can benefit from workplace pensions.”

A separate report also published today by the regulator showed that 82 per cent of micro employers were aware of their duties under auto-enrolment in 2019, which compared with 88 per cent in 2018.

Awareness among medium sized employers was also down, from 98 to 94 per cent.

Sir Steve Webb, director of policy at Royal London and former pensions minister, said: “Automatic enrolment has been a huge success story, but it is vital that the momentum is maintained.