Ninety-one per cent of defined contribution pension schemes submitted their scheme returns on time in 2017, The Pensions Regulator revealed, as it said more trustees are completing their duties earlier.
Publishing its latest Compliance and Enforcement quarterly bulletin, TPR said the figure is an increase of 10 per cent from 2016 when 81 per cent submitted their scheme returns on time.
Overall, more than 99 per cent of the total membership of DC schemes is in schemes that submitted returns on time.
TPR used its powers to take action against trustees 33 times between July and September for failing to complete a scheme return on time. It used its information gathering powers 43 times and there were 170 trustees appointed by TPR to run schemes to protect members’ benefits.
TPR has said that discussions and interventions from case teams has led to trustees tightening up their procedures, to the benefit of their members.
The compliance section of the bulletin also reveals that the decision to move to swifter enforcement action against trustees that submit late recovery plans – and to make them aware of the penalties they could receive - has led to a cut in the delay. TPR actively pursues late scheme returns and fines trustees who fail to submit this information to us.
Auto-enrolment enforcement powers were used a total of 38,095 times between July and September 2018 compared to 43,700 times the previous quarter; 12,551 fixed penalty notices were issued in the quarter, a 2.7 per cent increase from 12,220 in the previous quarter; 14,997 compliance notices were issued in the quarter – a 45 per cent reduction on the 27,219 issued in the previous quarter; and, 111 inspections were carried out, compared to 142 in the previous quarter.
Commenting, TPR executive director of frontline regulation, Nicola Parish, said: “This report shows how our clearer, quicker and tougher approach is having a positive impact. We’re engaging earlier with schemes and trustees to get them to do the right thing, on time, to give the greatest benefit to members.
“We’re being clearer with trustees about what they have to do, and moving quickly to take action if they don’t do it. Failing to meet these basic legal duties is unacceptable and while it’s encouraging that more trustees are doing the right thing, a minority of trustees still have to be prodded into action. The message is clear: if we tell you to do something, do it before we fine you.”
The bulletin’s section on automatic enrolment carries a case study of a major employer that had failed to pay more than £700,000 of pension contributions after miscalculating the amounts that were due for more than a year.
The employer blamed the error on staff being very busy when it alerted TPR and said that it would be willing to pay the roughly £350,000 shortfall of employer contributions as well as an additional amount to compensate for the loss of potential investment gains. However, TPR did not accept either the explanation or the proposal and ordered the employer to pay the full £700,000 of employer and employee contributions due.
The bulletin also describes how TPR’s new tougher approach is assisting in a number of complex investigations into suspected fraud and money laundering totalling tens of millions of pounds.
TPR is increasingly using production orders in money-laundering investigations to force banks, businesses or individuals to hand over the financial records of suspects, including bank statements and the details of money transfers.