TPR enforcement figures fall amid Covid-19 easements

Employers have continued to meet their pension duties despite Covid-19 challenges, according to The Pensions Regulator (TPR), with the impact of regulatory easements demonstrated in today's (27 August) enforcement figures.

The regulator's quarterly Compliance and Enforcement Bulletin showed that temporary easements introduced by TPR had led to a 55 per cent fall in the use of powers between April and June this year, compared to the previous quarter.

TPR director of automatic enrolment, Mel Charles, said the data demonstrated the regulator's “practical and proportionate” approach amid the pandemic, as well as the "swift and decisive action" taken to support employers.

He also emphasised that, despite the challenges of the pandemic, there had not been a “significant or unusual spike” in missed pension contributions to date.

Instead, the regulator emphasised that the “vast majority” of employers have continued to meet their auto enrolment duties, including completing their declaration of compliance and re-enrolment responsibilities.

Whilst TPR saw a slight increase in compliance notices issued during this quarter compared to Q1, it clarified that this reflects an 18 per cent increase in the number of employers who reached their declaration deadline between March and May 2020 compared to the previous quarter.

The bulletin also revealed a fall in the number of mandatory penalties for missing or incomplete Chair's Statements, from 52 in Q1, to just three in Q2, which in turn saw the total number of statutory powers used for scheme governance breaches decrease from 167 in Q1 to 97 in Q2.

In total, the regulator used its powers for automatic enrolment breaches 15,733 times in Q2, more than half the number of instances seen in Q1 2020 (35,174).

Meanwhile, the number of fixed penalty notices issued (1,555) was six times fewer than the previous quarter, whilst the number of escalating penalty notices issued (625) was five times fewer than Q1.

The bulletin was published amid the launch of the regulator's new advertising campaign, intended to remind employers that while their workplace has changed amid the pandemic, their pension duties towards their staff remain the same.

Charles emphasised that whilst TPR had introduced a number of easements in line with the regulator's "risk based proportionate approach", protecting savers remains "at the heart of what we do".

Charles added: “While our flexibilities have supported employers through unprecedented times, we have kept a close eye on compliance.

“Early indications are that the vast majority of employers have successfully met their duties, however we will take appropriate action, including financial penalties, where employers fail to act.

“The success of automatic enrolment has been hard won with commitment from government, the industry and most of all, 1.7 million employers who have been doing the right thing for their staff and putting them into a pension.

“It is now vital that we guard that success so that millions of people can continue to save now and in the future.”

The regulator also noted that in many cases enforcement action has been triggered by whistle blowers, adding that the warning of "steep financial penalties" has often been enough to ensure compliance.

For instance, it highlighted one major global restaurant operator which had not paid across £45,000 in missing staff contributions, explaining that these payments have now been made, with contributions since ongoing.

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