The Pensions Regulator (TPR) has ordered a firm to pay back more than £700,000 of pension contributions after it miscalculated the amounts due for more than a year.
The auto-enrolment (AE) section of its latest quarterly bulletin for July to September stated the “major employer” blamed the error on staff being “very busy” when it alerted the watchdog and said that it would be willing to pay the roughly £350,000 shortfall of employer contributions as well as an additional amount to compensate for the loss of potential investment gains.
According to TPR, it did not accept either the explanation or the proposal and ordered the employer to pay the full amount due. The unnamed firm paid the outstanding amount in July this year, and is “now compliant with AE responsibilities”.
The bulletin also noted that early engagement by the watchdog has led to trustees “tightening up their procedures to the benefit of their members”. It comes following the adoption of its ‘clearer quicker tougher’ approach, and commitment to using its powers more effectively.
TPR noted that discussions and interventions from its case teams has, for example, led to 91% of defined contribution (DC) schemes to submit their scheme returns on time in 2017 – an increase of 10% from a year earlier. According to TPR, overall, more than 99% of the total membership of DC schemes were in schemes that submitted returns on time last year.
The compliance section of the bulletin also revealed that the decision to move to swifter enforcement action against trustees that submit late recovery plans – and to make them aware of the penalties they could receive – has led to a cut in the delay. TPR actively pursues late scheme returns and fines trustees who fail to submit this information.
‘Clearer, quicker and tougher’
Executive director of frontline regulation Nicola Parish said the report shows how its ‘clearer, quicker and tougher’ approach is having a positive impact.
“We’re engaging earlier with schemes and trustees to get them to do the right thing, on time, to give the greatest benefit to members. We’re being clearer with trustees about what they have to do, and moving quickly to take action if they don’t do it.
“Failing to meet these basic legal duties is unacceptable and while it’s encouraging that more trustees are doing the right thing, a minority of trustees still have to be prodded into action. The message is clear: if we tell you to do something, do it before we fine you.”
The regulator has exercised its powers on numerous occasions this year. It used this power for the first time in August under the Proceeds of Crime Act 2002 as part of a fraud investigation.
Meanwhile, it ordered recruitment agency Workchain to pay £280,000, its largest fine and custodial sentences, for illegally opting staff out of their pension.
Four trustees of Pakistan International Airlines’ Retirement and Death Benefits Plan were fined £500 each by TPR for failing to audit accounts on time for two years in a row, and Now Pension Trustee was fined £70,000 and issued with an improvement notice. Furthermore, a bus company and its managing director were also fined more than £60,000 by the regulator after they admitted trying to avoid providing its employees with a workplace pension.