The Pensions Regulator has fined Rentokil Initial’s pension fund £25,000 earlier this year for failing to complete two valuations for its Initial Hospital Service Limited No.1 defined benefit scheme, it has emerged.
Rentokil Initial Pension Trustee Limited failed to complete 2012 and 2015 valuations for the 140-member strong scheme by their respective deadlines of July 2013 and July 2016.
The trustees told TPR that the reason for the delay in completing both valuations was a planned merger with a separate scheme run by their sponsoring employer, Rentokil Initial.
TPR repeatedly advised the trustee that the proposed merger was not a valid reason for failing to complete the valuations and when the proposed merger failed to materialise and the valuations had not been submitted by the end of 2017, it decided to take formal action.
The watchdog’s determinations panel upheld a recommendation that the trustees be fined £25,000 fine under section 10 of the Pensions Act 1995 for failing to take reasonable steps to complete the valuations.
The panel accused the trustee board, which according to Companies House is made up of nine trustees, of a “flagrant disregard” of its obligations and for “putting members at risk”.
The trustees did not dispute the panel’s findings and the fine was paid.
In addition, TPR also issued an improvement notice to the trustee board and a third party notice to the sponsoring employer in April under sections 13 and 14 of the Pensions Act 2004, which required both outstanding valuations to be submitted to TPR by the end of May. Both valuations were subsequently sent through to TPR.
TPR executive director of frontline regulation, Nicola Parish, said: “We are monitoring valuation due dates more regularly and this fine shows we will take tough action sooner to put things right where breaches occur.
“The behaviours in this case were so severe that, not only did we issue Improvement Notices, we also recommended to the determinations panel that a fine should be imposed at a level that would be likely to improve behaviours in the future and be an effective deterrent for other trustees. We are pleased the determinations panel agreed with our approach.”
Since April 2017, TPR has issued nine warning notices for late valuations. It says this is part of its “clearer, quicker, tougher approach” to missed valuations.