NEWS


TPRrampsupinformation requestsundernewethos


By Sophia Imeson


The Pensions Regulator’s efforts to become more effective and proactive has seen a 133 per cent spike in the number of s72 requests in the past five years


T


he Pensions Regulator’s “clearer, quicker tougher” approach is one of the main reasons behind


the recent spike in section 72 requests, experts say. Almost 1,000 s72 requests for information about pension scheme funding, administration and legislative compliance have been made by the watchdog since 2010. The data, released by the


regulator following a freedom of information request by law firm Herbert Smith Freehills, revealed a 133 per cent increase in the number of requests over the five years to June 2019, compared with the previous five-year period. According to the figures,


between 2010 and 2016 there were no enforcement actions. However, in 2017 enforcement action was taken in four cases, and this was repeated last year. This suggests the watchdog is increasingly likely to enforce its requests for information, according to Herbert Smith Freehills. Under section 72 of the Pensions


Act 2004, the regulator has the power to request certain information and documents relevant to its statutory functions. If the recipient, such as a


trustee, scheme manager or employer, fails to provide such information without a reasonable excuse, it is a criminal offence and can lead to an unlimited fine. A high-profile example of the watchdog’s use of its s72 powers involved Dominic Chappell, director and majority shareholder of the company that purchased BHS for £1. Mr Chappell was


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ordered in December 2018 to pay more than £124,000 for failing to hand over information to the regulator.


‘Clearer, quicker and tougher’ Experts agreed that one of the main reasons behind the increased number of s72 notices was the watchdog’s aim to be more effective and proactive. Indeed, a spokesperson for


TPR said: “Our power to require companies and individuals to provide us with information is an important tool in our regulatory case work. “In line with our clearer, quicker


and tougher approach, we will not hesitate to prosecute companies or individuals if they fail to give us the information we require to investigate cases and ultimately protect pension savers.” Samantha Brown, partner


in Herbert Smith Freehills’ employment, pensions and incentives practice, highlighted that over the past year or so the regulator had been under more intense public scrutiny and criticism than ever. “A lot of that has been quite


acute criticism about failure to act, and so on,” she said.


Number of section 72 RFIs reached a new high in 2018


50 100 150 200


0 Source: The Pensions Regulator


We will not hesitate to prosecute companies or individuals if they fail to give us the information we require to


investigate cases TPR spokesperson


In its corporate plan for 2018-


2021, published last year, the regulator outlined its plans to become “clearer, quicker and tougher” as part of its intention to boost its effectiveness by taking action “in a broader and more visible way”. Ms Brown noted: “One of the


reasons I think why they haven’t exercised their powers in the past is through lack of information, because the thresholds that they need tomake to exercise their powers – particularly their moral hazard powers – are quite high. “The section 72 gives themthe


ability to source the information that they need to support their broader powers.” She added: “I think probably,


if you look more broadly across the piece as to how many powers they have exercised recently, or how many investigations they have conducted, you will find that has gone up as well.” Ms Brown noted it was possible


for one investigation to involve multiple notices being issued. “Success breeds success, and


certainly in some cases that we have seen they may have issued one section 72 notice, found that has resulted in them getting a lot of disclosure, realise they need some more, and so they’ve issued another one,” she said. Another example of the


regulator using its s72 power


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