TPR: COVID-19 update on reporting duties and enforcement activity
TPR easements come to an end and enforcement activity returns to normal.
As a result of the COVID-19 situation, The Pensions Regulator (TPR) had been adopting a more flexible approach to expectations in several areas, and when enforcement action would be appropriate.
TPR has clarified that reporting should now be back to normal. Reporting requirements for pension schemes, paused in response to COVID-19, resumed from 1 July.
In deciding whether to take enforcement action, TPR will assess breaches of administrative and compliance requirements on a case-by-case basis and respond pragmatically where a scheme can demonstrate COVID-19 related reasons for any breaches.
The Pensions Ombudsman has confirmed it will take into account TPR’s latest guidance on COVID-19 issues if it receives complaints about delays caused by COVID-19 circumstances.
Reporting requirement changes - trustees and administrators
Due to the COVID-19 situation TPR had paused certain reporting requirements for trustees and administrators. From 1 July, reporting requirements resumed as normal, including for:
- Deficit repair contributions - trustees will need to submit a revised recovery plan or report missed contributions.
- Late valuations and recovery plan not agreed.
- Delays in cash equivalent transfer quotations and payments.
- Failure to prepare audited accounts.
- Master trusts, where TPR expects formal reporting to be resumed.
Outstanding payment reporting: change to COVID-19 information for providers
From 1 January 2021, TPR is asking DC pension schemes and providers to revert to reporting material payment failures that are 90 days outstanding, rather than 150 days, as set out in code of practice 5 for occupational pension schemes and code of practice 6 for personal pension schemes.
Therefore, reporting will become mandatory by 1 April 2021 for all payment failures that are 90 days outstanding.
This change back to ‘business as usual’ reporting will have an impact on providers’ systems and processes; therefore TPR is providing three months for schemes to make the necessary adjustments.
This easement does not and has never applied any other category of payment failure specified in the codes of practice 5 and 6. Further commentary and guidance is available via the Maintaining Contributions Portal.
Enforcement - chair’s statements and failure to prepare audited accounts
TPR will revert to reviewing chair's statements submitted on and after 1 October 2020 as usual (unless a scheme is specifically notified otherwise). Any chair’s statements received before 30 September 2020 (including in relation to master trusts) will be returned unread – this statement should not be taken as any indication that the statement in question complies with the requirements.
Please note that the legislation on chair’s statements does not give TPR any discretion about imposing fines where they are notified, or form the view, that the trustees have not prepared a compliant chair’s statement on time.
In light of this, TPR will not publish details of chair’s statement fines in the penalties section of its website at the time of the next compliance and enforcement bulletin. TPR will revisit this decision for future issues of the bulleting as the situation develops and may revert to its usual approach in situations where this is deemed appropriate.
TPR’s normal approach to enforcement in relation to late preparation of audited accounts will resume from 1 October.
Enforcement - investment governance
TPR does not expect to take regulatory action if a review of a statement of investment principles (or statement in relation to any default arrangement) is not delayed beyond 30 September 2020. From 1 October 2020, its normal approach to enforcement will resume.
Schemes in relationship supervision
In view of current circumstances, TPR is refocusing its relationship-managed supervisory activity, on near-term risks rather than the standard activities in its supervisory cycle. It will be speaking to schemes assessed as presenting risks directly to better understand their position and the risks and issues that have arisen.
If a relationship-managed scheme has immediate concerns due to the current situation, the scheme should contact its named supervisor.
TPR will continue to take a risk-based approach in its regulatory activity, reviewing and assessing incoming requests against a range of risk indicators.
Schemes should contact TPR via email@example.com if they require assistance.
TPR has been clear throughout the pandemic that employers must continue to make contributions in full and on time. The extension of the maximum period for reporting late payments reflected its proportionate approach to enforcement in light of the pressure on employers.
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