TPR has issued two compliance and enforcement bulletins showing how it has used its powers to tackle non-compliance with legal requirements for pension schemes to complete a scheme return and annual chair’s statement. The aim of the bulletins is to inform the industry of TPR’s experience to date and to increase trustees’ understanding of these duties.
The majority of schemes complied with new legislation obliging them to prepare an annual governance statement, signed by the chair of trustees. During 2016, 85 schemes received a mandatory fine for not preparing a chair’s statement. A large proportion of those failing to produce a statement were schemes with fewer than 100 members.
A second bulletin details the action taken by TPR to achieve compliance with legal requirements to provide TPR with a scheme return.
TPR received 16,963 scheme returns, and after starting enforcement action against trustees received a further 868 returns. A number of trustees failed to comply even after receiving a warning from TPR and so we issued fines to 88 trustees.
Nicola Parish, Executive Director for Frontline Regulation at TPR, said: “Non-compliance with basic requirements such as completion of a chair’s statement and a scheme return may indicate broader governance issues. This is important because ultimately, poor standards of governance can impact the value of members’ pension pots. We want all members to be saving in well-run schemes and will take action to help schemes get the basics right.
"Our 21st Century trustee work is focused on raising the standard of trusteeship and our enforcement action is an important part of that.
"We communicate regularly with trustees to educate them on their duties and to draw attention to our codes and guidance. Our trustee toolkit includes a series of online learning modules and downloadable resources developed to help trustees meet the minimum level of knowledge and understanding introduced in the Pensions Act 2004. Despite this, some continue to fail to meet basic governance requirements. Our message to them is that ignorance is no excuse – if you breach your duties, you will face action."
Last year TPR made clear it would act after data showed compliance with basic duties had fallen 18%. As a result of our focus on scheme return compliance and enforcement efforts, over 97% of schemes are now compliant.
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