The trustees of Now: Pensions have been fined £70,000 for administration problems dating back several years that have led to contributions not being collected and invested in market.
Now: Pensions has been issued it with an Improvement Notice, while a Third Party Notice, has been issued to the trust manager, Now: Pensions Ltd (NPL).
The notices direct that the trustee and NPL must complete a series of steps to rectify their failure to remedy the administrative issues. These steps must be taken by specified deadlines over a number of weeks and months. Both the trustee and NPL have indicated that they are prioritising resolving these issues.
The trustee and NPL have also agreed to set up a scheme of compensation for members who have been affected. The fines will be paid for by Now: Pensions Limited.
The issuing of the notices and the fines are part of a package of measures TPR has used to ensure that NPL and the trustee tackle the issues.
In February 2017, with the consent of the trustee, TPR required the trustee to commission an independent skilled person’s report into the scheme’s ongoing issues. Following the issue of the report in June 2017, TPR continued to engage with NPL and the trustee to ensure steps were taken to address the shortcomings identified.
Now: Pensions voluntarily withdraw from the master trust assurance list in July 2017 and appointed an independent trustee, Dalriada, to the trustee board in October 2017.
TPR fined the trustee £50,000 in November 2017 for failing to ensure that all employee and employer contributions were collected and invested promptly over the period from 6 April 2015 to 8 August 2017, and a further £20,000 in January 2018 for failing to keep some members properly informed.
The fine follows a slew of bad news for Now: Pensions, including its annualised investment returns being found to be less than a third those of its peers for the three years to June 2017 in research conducted by Corporate Adviser last year.
TPR executive director of frontline regulation Nicola Parish says: “This package of measures, together with those voluntarily taken by the trustee, should ensure that the issues with Now: Pensions which have persisted for so long are finally resolved.
“We will continue to monitor progress and will issue further fines if necessary to ensure that the trustee and NPL focus on resolving the issues as swiftly as possible.”
Now: Pensions interim CEO Troy Clutterbuck says: “I am truly sorry for the delays that some clients have experienced processing pension contributions. We’ve been working closely with The Pensions Regulator on the steps detailed in the Improvement Notice and Third Party notice and have made significant progress. I’m pleased to say that the vast majority of schemes are now up to date. Work continues on a small percentage of larger and more complex schemes and these will be updated by April – the deadline set by the Regulator.
“NPL has invested more than £4m in our own market-leading auto enrolment system called the Now: Pensions Gateway. Over 85 per cent of our clients are already on Gateway and the platform ensures that poor quality or incomplete data is not accepted and that employers receive immediate detailed feedback as to the reasons why so that the data can be correctly and successfully resubmitted. All remaining clients will be moved onto this system by April.
“As one of the largest auto enrolment providers, we remain very much open for business. We will continue to play a key role in safeguarding the success of the policy so that it delivers on its promise of providing millions more people with a better retirement.”
Now: Pensions chair of trustees Nigel Waterson says: “I want to emphasise that all money we’ve received is completely safe. We’ve analysed each and every member record and if a member has experienced a delay, we will make sure we put them back in the same position they would have been in had their contributions been processed in a timely manner. Our average pot size is £385 so the typical adjustment will be less than £2. Our approach to doing this has been shared with the Regulator and approved by an independent actuary.”