New information gathering powers under the Pension Schemes Bill
The Pension Schemes Bill had its second reading in the House of Commons on 7 October 2020. The Bill has all party support, and in a well informed debate the most entertaining remarks came from Guy Opperman MP agreeing with comments from Rob Roberts MP that the Bill gives new dentures to a regulator that previously may have lacked a little bite.
This resonates with other views expressed in the debate that there has been significant change since it was created in The Pensions Regulator’s (TPR) role in protecting workplace pensions savings and building confidence in the industry, which means that its powers need to evolve to fit the new compliance and enforcement challenges that has arisen over time.
Unrelated to the bill but aligned to the need for more bite, under new regulations made on 24 September (the Investigatory Powers (Communications Data) (Relevant Public Authorities and Designated Senior Officers) Regulations 2020), TPR was added to the list of public authorities with the power to obtain communications data, such as the metadata for an email, though not the contents of that communication itself.
In explaining the reasons for giving these powers, the government acknowledged that TPR’s enforcement activity had risen following the introduction of automatic enrolment to over one million businesses since 2012, saying it has “dramatically increased the scale of TPR’s enforcement activity and highlighted the need for effective sanctions, including prosecution”.
“In parallel with this, TPR has adapted its approach to its other areas of responsibility, putting more emphasis on prosecution as a means of securing compliance and punishing wrongdoing. Communications data powers will be highly valuable in investigations as digital footprints become increasingly significant.”
TPR already has powers to require information to be provided to it under section 72 of the Pensions Act 2004 and relies on this power heavily in enforcement activity. Failing to respond to s72 requests has featured as one of the top five reasons for TPR issuing statutory penalty notices to date. And there has been a number of successful criminal prosecutions by TPR against people failing to reply, or providing false or misleading information to it.
The bill will give it additional powers of investigation. In particular TPR will get the power to require any person who could receive a section 72 notice (including trustees, employers and their advisers) to “attend before the regulator” at a time and place that it specifies to answer questions and provide explanations on anything set out in that notice which are relevant to the exercise of TPR’s functions.
This sounds like being required to attend a meeting to talk about a letter. But it will be a criminal offence (with the risk of being fined by the courts), without reasonable excuse to fail to attend that meeting or to answer questions when you get there.
TPR is also getting extended powers to inspect premises (other than private homes) at any reasonable time. The grounds for doing so will be expanded to include “moral hazard” investigations where TPR is considering issuing a contribution notice or financial support direction.
The inspector will now be able to enter any premises where documents relevant to the administration of the employer are being held. Power already exists (though for more limited reasons, currently) for entry into premises where members of the scheme are employed, documents relating to the administration of the scheme are held or the administration is carried out.
Once inside the building, the inspector can demand that documents are provided, take copies of or the originals of those documents and interview any person present. Refusing to co-operate with an inspection (such as refusing, without reasonable excuse, to let the inspector in or to provide the paperwork requested) remains a criminal offence.
Read Anne-Marie’s article in Pensio
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