The Pensions Regulator has recovered a mere 30 per cent of the fines that it had hoped to receive despite enforcement activity reaching a record high, data has shown.
Data obtained from TPR by law firm Clyde & Co showed there were 128,807 enforcement actions taken by the regulator in the year to March 31, 2019, up 26 per cent on the 102,497 in the previous year.
Whistleblowing reports received by the watchdog saw a 74 per cent increase in the period, rising to 8,445, while the total value of enforcement actions more than doubled, reaching £124.6m.
However, only £18.4m of the £62.1m that was considered recoverable debt has actually been recovered.
According to Terry Saeedi, head of pensions at Clyde & Co, enforcement activity has increased rapidly in recent years and employers should take note of this.
She said: “With all political parties pledging funding boosts on the campaign trail, it is clear that better recovery could enable them to keep some of their promises.
“Whatever the colour of the new government, it is likely to grant strengthened powers to the regulator to take action against irresponsible employers.”
Ms Saeedi continued: “As the value of fines continues to increase, we can expect the regulator to look at ways to improve the collection of outstanding debts if the recovery rate does not improve.”
There are four enforcement actions available to TPR: compliance notices, unpaid contribution notices, fixed penalty notices and escalating penalty notices.
A compliance notice is an order to take steps to comply with legislation – failure to do so can result in a daily fine.
The data showed despite a 4 per cent decrease in the number of compliance notices issued in 2018/19 compared with the previous year, this remained the most commonly used enforcement action, with 58,285 such notices handed out in total.
Ms Saeedi said: "Failure to comply with the obligations after having received a compliance notice can result in a hefty daily fine, which can have significant consequences for smaller companies, who often struggle to implement the necessary changes as many do not have HR departments."
The biggest increase was among unpaid contribution notices, which increased fourfold last year compared with 2017/18.
These are issued when an employer has not paid its contributions into a pension scheme by the required date.
If contributions are unpaid for too long, the employer becomes liable to pay the employees' contributions as well as its own.
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