The Pensions Regulator only recovers 30% of penalties
06 December 2019
Although enforcement activity from The Pensions Regulator (TPR) has reached record highs, it has been revealed that only £18.4 million of £62.1 million that was classified as debt had been recovered at the end of March 2019. This means that only approximately 30% of penalties had been recovered by TPR.
Data has revealed that there were 128,807 enforcement actions taken by the regulator up until the end of March 2019 which was a 26 per cent increase on the previous year’s amount, which saw 102,497 enforcement actions. The increase in actions is believed to have been prompted by a surge in the amount of whistleblowing reports that were sent to the watchdog over that period.
The enforcement actions that TPR can take include compliance notices, unpaid contribution notices, fixed penalty notices and escalating penalty notices. The most frequently used is the compliance notice, which is an order to comply with legislation, but there was a decrease in this method of four per cent in 2018/19 when compared to the previous year. Unpaid contribution notices increased at the fastest rate and were used four times the amount in 2017/18 but overall compliance notices remained the most commonly used action. Failure to comply with the notice often results in a daily fine for the non-compliant party.
The head of pensions at Clyde & Co, Terry Saeedi, commented:
“With all political parties pledging funding boosts on the campaign trail, it is clear that better recovery could enable them to keep some of their promises.
Whatever the colour of the new government, it is likely to grant strengthened powers to the regulator to take action against irresponsible employers.
As the value of fines continues to increase, we can expect the regulator to look at ways to improve the collection of outstanding debts if the recovery rate does not improve.”