The Pensions Regulator fines schemes non-compliant with basic auto-enrolment duties

pension piggy

The Pensions Regulator (TPR) has published the names of workplace pension schemes whose trustees have been fined for not providing legally required documentation.

Fines were issued to pension trustees for failure to submit scheme returns after receiving a warning from TPR, and for failure to prepare a chair’s statement or for providing a non-compliant chair’s statement.

Pension schemes that have been fined for failing to submit an annual chair statement at 31 December 2017 include the East India 2006 Retirement Benefit Scheme and the Miller Executive Pension Scheme, both of which have been fined £2,000. The Forest Laboratories UK Pension Scheme has been fined £1,500.

The Ethika Auto Enrolment Pension Scheme has been fined £2,000 for providing a non-compliant chair’s statement, at 30 December 2017. Pension schemes that have also been fined for this reason, up to 30 September 2017, include My Workplace Pension Scheme, Vedius Pension Trust and The Nurture Master Trust, which have all been fined £2,000.

No fines were delivered for pension schemes failing to submit scheme returns on time as at 31 December 2017.

The lists have been published alongside TPR’s Compliance and enforcement quarterly bulletin: October-December 2017 report. The published lists include organisations that TPR has secured a court order against for failure to pay escalating penalty notices for auto-enrolment non-compliance, as well as those that have paid escalating penalty notices but have not yet fulfilled their auto-enrolment duties.

An escalating penalty notice is issued if employers continue to be non-compliant after receiving a fixed penalty notice worth £400. An escalating penalty notice can increase by up to £10,000 a day until the fee is paid. Employers that remain non-compliant after being issued with a penalty notice may have to face additional enforcement action, such as prosecution.

Organisations that feature on the list of employers that are subject to a court order following an unpaid escalating penalty notice include Borders Hotel, which owes £52,500, Southwest Event Security, which owes £35,000, and 606 Dental Surgery, which owes £14,000.

Employers that feature on the list of organisations that have paid an escalating penalty notice but remain non-compliant with auto-enrolment regulations include Light Fantastic Orkney, which paid £24,500 for an escalating penalty notice, as well as PW Planning Systems and Backpackers Lodge. Both of these organisations paid £5,000 for an escalating penalty notice.

The bulletin found that 4,197 more compliance notices were issued to employers for failing to meet auto-enrolment duties between October and December 2017 compared to the previous quarter, and 1,956 more fixed penalty notices have been issued over the last three months for employers failing to comply with a statutory notice or a specific duty, compared to last quarter.

TPR used its enforcement powers to regulate governance and administration rules 235 times against schemes between October and December 2017, and a total of 28,446 cases of enforcement powers being used for auto-enrolment were recorded over this period.

Nicola Parish, executive director of frontline regulation at TPR, said: “What some trustees put together as a chair’s statement is disappointing. These statements are important documents and should demonstrate to scheme members that the trustees are doing a good job and savers’ money is being well looked after.

“This is not just a tick box exercise. The chair’s statement should make declarations about key aspects of governance, from making sure a scheme’s costs and charges represent good value for money to assessing the skills and knowledge of trustees. A statement with little explanation offers no comfort to pension savers that their money is safe.

“Schemes that don’t meet the requirements will not only get a fine, but will now be named on our website too.”