The Pensions Regulator (TPR) has imposed its first fine on a trustee of a DC scheme, fining the trustee of Abbey Manor Group Pension Scheme £500 for failing to prepare an annual governance statement.
Abbey Manor Group Pension Scheme failed to meet the new statutory requirement to prepare an annual governance statement signed by the chair of trustees, which was introduced last year, which carries a mandatory fine of up to £2,000.
Abbey Manor Group Pension Scheme received the lower fine after it promptly complied with their legal duty to notify TPR of the breach, and quickly took action to prepare the required statement.
In a change from last year, trustees of schemes providing DC benefits are now required to provide information in their scheme return about how they comply with certain requirements of the 2015 legislation, including identifying the chair of trustees and confirming they have prepared a governance statement signed by the chair.
TPR is advising trustees about a number of changes to the scheme return so they can plan in advance. Scheme return notices requiring the revised scheme return to be provided to TPR will be sent out from July this year.
Trustees are required to notify TPR of breaches via the scheme return and TPR will take action if the scheme return is not completed. The current number of warning notices issued for the failure to submit a scheme return by the due date stands at 22.
TPR executive director for regulatory policy Andrew Warwick-Thompson says: “This case demonstrates that we must comply with the law and must impose a penalty where trustees fail to prepare an annual governance statement signed by the chair of trustees.
“In this particular case, the trustees did the right thing by promptly complying with their duty to notify us of the breach, and quickly taking action to prepare the required statement. A fine of up to £2,000 could be imposed for such a breach.
“We are supporting trustees in numerous ways, including new web guidance and news-by-email to help them understand how to complete the new scheme return in order to demonstrate they are meeting new governance standards.
“However, schemes should be aware that this type of breach will result in a fine and we hope that our report will act as a reminder and a deterrent for other schemes. We will act where trustees demonstrate that they are not meeting even the basic ‘hygiene’ duties we expect.”
