Pitmans Trustees Limited (PTL) has been fined £6,000 by The Pensions Regulator for failing to prepare an annual governance statement signed by the chair of the trustees on three separate occasions.

The amount is made up of three £2,000 fines in relation to the trustee of the Precision Carbide Tools Limited Pensions and Life Assurance Scheme, the Comshare Retirement and Death Benefits Plan and the EBC Pension Scheme.

New regulations that came into effect from 6 April 2015 mean that occupational pension schemes providing money purchase benefits are now required by law to prepare an annual statement, signed by the chair of the trustees, within seven months of the end of each scheme year.

However, on the 18 May 2016, PTL notified the regulator in writing that it had failed to prepare a chair’s statement for the Precision Carbide Tools Limited Pensions and Life Assurance Scheme. Following a discussion with PTL, the regulator received confirmation that no statement had been prepared for Comshare Retirement and Death Benefits Plan and the EBC Pension Scheme either.

In their correspondence to the regulator, PTL said they had taken the action and prepared the required statements after the breaches had occurred.

A breach of this kind leads to a mandatory penalty and the TPR is legally obliged to impose a fine of between £500 and £2,000 on the trustee.

As a result the maximum fine of £2,000 was imposed on 4 July because the schemes had a professional trustee in place and there were no mitigating factors. The fines were paid with no contest on 11 July 2016.

TPR issued a similar warning in June after fining a scheme trustee £500 for failing to meet the same requirement. However, TPR is again urging trustees of DC schemes to comply with new pensions law or face a mandatory fine.

Commenting on the fine, TPR executive director for frontline regulation Nicola Parish said professional trustees are expected to meet a higher standard of care and to demonstrate a greater level of knowledge and understanding than other trustees.

"We will enforce the law and impose a penalty where trustees fail to prepare an annual governance statement signed by the chair of trustees. We are supporting trustees in numerous ways, including new web guidance and news-by-email to help them understand how to complete the new scheme return in order to demonstrate they are meeting new governance standards.

"However, schemes should be aware that this type of breach will result in a fine and we hope that our report will act as a reminder to all trustees, professional or otherwise, to ensure they complete the chair’s statement on time."

Trustees of schemes providing DC benefits are now required to provide information in their scheme return about how they comply with certain requirements of the 2015 legislation, including identifying the chair of trustees and confirming they have prepared a governance statement signed by the chair.

TPR is advising trustees about a number of changes to the scheme return so they can plan in advance. Scheme return notices requiring the revised scheme return to be provided to TPR were sent out from July this year.

Trustees are required to notify TPR of breaches via the scheme return and TPR will take action if the scheme return is not completed. The current number of warning notices issued for the failure to submit a scheme return by the due date stands at 23.

Nicola Parish added: "We will act where trustees demonstrate that they are not complying even with the basic duties we expect."

TPR has issued a regulatory intervention report about the case.

Commenting on the incident, PTL managing director Richard Butcher said: "We regret the fact that we did miss these deadlines, we are very sorry and no members suffered a loss as a result of us missing these deadlines, no members funds were in danger or anything else like that. That's not to minimise it but it was just the late signing of some chair's annual statements.

"We have a system that we use to track all of statutory deadlines to make sure that we don't miss them and there was a delay in programming the date for the chair's annual statement. These were all statements that were due for year end in August of last year so these were some of the very first ones that were going to have to be produced and because there was the delay we missed them."

"Having identified the problems we proactively reported ourselves to the regulator as soon as we could do and cooperated fully with their inquiry and we'd fixed the breaches by that time already and the system was up and running so our clients can feel reassured we won't miss the deadline again. We accepted and paid the fines promptly because we were in the wrong for missing those particular deadlines."

He confirmed that the three schemes continue to be clients of PTL and the schemes themselves have suffered no loss.

Share Story: