Enforcement actions from the Pensions Regulator (TPR) more than doubled over the last year, while whistleblowing reports received by TPR increased by 35%, according to research from global law firm Clyde & Co.
Data obtained directly from TPR shows that there were 102,497 enforcement actions taken by regulator in the year to March 31st 2018, up from 50,068 in the previous year. Indeed, enforcement actions taken by TPR in 2017/18 make up 63% of all enforcement actions taken since April 1 2013. While whistleblowing reports received by the regulator rose to 4,856, from 3,593 over the same period.
Mark Howard, Head of Pensions at Clyde & Co, comments: “Six years on since the introduction of Automatic Enrolment (AE), the regulator is bearing its teeth and employers are now feeling the full force of its enforcement powers.”
“The biggest concern for all employers should be the rate at which enforcement activity is increasing. In the last six months of 2017/18 the regulator handed out £7.4m in fixed penalty notices, compared to £4.9m for the whole of the previous year (2016/17), so alarm bells should certainly be ringing.”
Clyde & Co explains that under the workplace pension’s law, which came into force in 2012, all businesses must enrol all eligible employees into a pension’s scheme or face enforcement action from the regulator. Failure to comply with the auto-enrolment regulations can lead to fines of up to £10,000 per day, depending on the size of the business.
Howard continues: “The primary driver of the uptick in whistleblowing reports is almost certainly AE compliance failures. Over the last year the regulator has been on a significant publicity drive to ensure employees are aware of their rights and employers are aware of their obligations. In some respects, it appears to be paying off.”
“It is something of a virtuous circle for the regulator as the more noise is made about employers being prosecuted for AE compliance failures, the more likely whistleblowers are to report suspected ‘wrongdoing’, which gives the regulator more reasons to target employers and so on.”
Leave a Comment