The Pensions Regulator has stepped up the use of its enforcement powers for frontline regulation, with 10 per cent of the total number of times it has used its powers since April 2014 being in the last quarter.
In the period between April and June 2018, TPR used its powers 358 times, bringing the total number of times it has used its powers since April 2014 to 3585, its latest compliance and enforcement bulletin has revealed.
The latest figures show that the regulator has used a number of different powers for the first time by TPR’s case teams dealing with pension scams, scheme valuations and automatic enrolment. For example, production orders, which require institutions to hand over evidentially admissible financial information on individuals or organisations under the Proceeds of Crime Act 2002, were used successfully as part of an investigation into pension fraud.
This was the first time TPR secured these orders that required a bank to hand over statements and other details of the accounts linked to the trustees of a pension scheme, which were needed for the ongoing criminal investigation.
Secondly, TPR fined a trustee that failed to complete a valuation on its DB pension scheme, using its power under section 10 of the Pensions Act 1995. The trustee was ordered to pay a £25,000 fine after it twice failed to have the required scheme valuation completed, as is required every three years.
Thirdly, TPR prosecuted a recruitment company, its directors and a number of its senior staff after they worked together to illegally opt out workers who had been automatically enrolled into a workplace pension scheme. This was the first time TPR has prosecuted offences under the Computer Misuse Act 1990. Each of the defendants has pleaded guilty to the charges.
Commenting, TPR executive director of frontline regulation Nicola Parish said: "Our actions over the quarter demonstrate how we are continuing to develop as an organisation to be clearer, quicker and tougher. We’re using powers for the first time and working closely with other organisations to better protect members of pension schemes."
It isn’t always necessary for TPR to use its powers though. In a recent DB funding case TPR gained a positive result by working with an employer and its scheme trustees to agree on a funding proposal rather than having to use its formal powers under the Pensions Act 2004.
The employer and trustees were considering clearing the £120m deficit using a 14-year recovery plan but TPR took issue with this proposal particularly as the employer was strong and paid large dividends. TPR was clear in its expectations and both the employer and the trustees put in place a plan to clear the deficit in seven years through far larger payments into the scheme.
In addition, with regards to auto-enrolment, the regulator used its enforcement powers 43,700 times between April and June 2018, compared to 35,862 the previous quarter. 12,220 fixed penalty notices were issued in the quarter, a 9.5 per cent increase from 11,156 in the previous period. 27,219 compliance notices were issued in the quarter – the most in any three month period and an average of one every five minutes, and 142 inspections were carried out, compared to 112 in the previous quarter.