Trustee fined for failing to report unpaid pension contributions

The administrators of a master trust failed to report the fact that they had not collected or invested nearly £900,000 of pension contributions on behalf of their members.

Smart Pension Limited, which runs the Autoenrolment.co.uk master trust, failed to tell The Pensions Regulator (TPR) that 498 employers had failed to pay contributions that were due. Smart Pension also didn’t inform the pension scheme members of the issue.

The findings are reported in a determination notice published today following a TPR investigation. It found that the scheme trustee, EC2 Master Ltd, did not ensure the scheme had a proper reporting system in place to comply with statutory requirements.

Failing to report material payment failures is punishable by a civil penalty under Section 10 of the Pensions Act 1995. TPR has now fined the scheme trustee £15,000 for not reporting the missing contributions and for failing to tell members about the problem.

Smart Pension launched Autoenrolment.co.uk in January 2015 to serve the automatic enrolment market.

In total, around 2,115 members were affected by the failures between August 2015 and May 2017. They were only informed that their contributions had not been collected and invested after TPR informed Smart Pension it was their duty to contact them.

Following the investigation, new systems and processes have now been implemented by the trustees and Smart Pension. Smart Pension also worked quickly with TPR to report the employers so enforcement action could be taken where necessary to help protect their members.

TPR’s executive director of frontline regulation Nicola Parish said: “It is vital that workers can be confident that their contributions are being collected and invested properly so that their savings can grow.

“They have a right to know if payments are not being made and we need to know so that we can investigate why it is happening. Smart Pension’s systems and processes were ineffective and the trustee’s failure to act on its responsibilities was unacceptable, but we are encouraged by the commitment of both to improving the way they work.

“We are clear that schemes must have efficient and robust processes in place to protect members’ funds. We will take action where this is not the case.”

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