The Pensions Regulator used its automatic enrolment powers 15 per cent more in the first quarter of 2019 than the previous quarter, it has revealed.
Publishing its latest quarterly Compliance and Enforcement Bulletin the regulator said the recent rise is due to an increasing number of employers reaching their three-year re-enrolment date and who must re-declare compliance to TPR, as well as the continued enforcement activity against employers after the first increase of combined minimum contributions in April 2018 to 5 per cent.
TPR takes action against employers who avoid their legal duties, including failing to give eligible staff a pension, ensure the correct amount is contributed into employees’ pension pots, and complete the Declaration of Compliance.
TPR director of automatic enrolment, Darren Ryder, said: “It is vital that employers meet their automatic enrolment duties to ensure savers receive the income in retirement that they are entitled to.
“This becomes all the more important as minimum contribution levels rise and automatic enrolment matures, meaning people will be saving more towards their pensions. As our enforcement action shows, we will be tough on anyone who fails to meet their legal pension duties.”
The regulator also detailed use of its powers it can use against defined benefit schemes, publishing several case studies. One anonymous case study reveals that a DB scheme is now better funded after an upfront payment of £10m, a reduction in the recovery plan length from 13 to seven years, annual deficit recovery payments of £3.7m and a commitment to stop dividend payments for six years.
The case is an example of how TPR is taking a tougher approach to scheme funding. It comes after TPR’s clear message in the recent Annual Funding Statement that schemes should be treated fairly, funding targets should be strong, recovery plans should be as short as possible, and dividends should not be paid if an employer is unable to support its pension scheme.
Commenting, TPR executive director of frontline regulation, Nicola Parish, said: “We have clearly set out our expectations for all workplace pension schemes and we will continue to intervene where we have concerns that a DB scheme is not being treated fairly by an employer.
“This is one of many examples of our work with trustees and employers to secure appropriate recovery plans and agree acceptable deficit recovery payments, better protecting the savers in those schemes.”
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