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Gathering info takes time If schemes are faced with a s72 notice, Mr Roberts said they should first make sure they fully understood the request and the rationale behind the request. They should also engage with
their advisers. “Quite often, some of the information would be contained by advisers – particularly the administrator and actuary,” he noted. Gathering information in
response to a s72 regulatory request can be time-consuming and expensive – sometimes costing “tens of thousands of pounds”, according toMs Brown. For example, some of the information the regulator has asked for does not yet exist in document form. “It is information that you will
recently involved Samuel Smith Old Brewery and its chairman Humphrey Smith pleading guilty last year for failing to provide information about its final salary schemes to TPR.
Scams spotted more quickly Chris Roberts, trustee representative at Dalriada Trustees, said the s72 figures were “a clear message that the regulator is more active in policing the governance of pension schemes”. He added that issues such as
pension scams were being spotted and caught a lot more quickly. In 2017, a regulatory
intervention report detailed how the watchdog used its s72 power to require information from a London-based firm of solicitors. The documents related to a
property linked to someone who was involved in a pension scam investigation – the solicitors and their client were not themselves under investigation. Mr Roberts noted those involved
in pension scams “will be a key focus in s72 powers, because
ultimately they don’t want to provide information”. He said: “The vast majority
of employers will engage. It’s relatively unusual a s72 is required, because if you’re proactively engaging with the regulator and providing them with what they need then that power is not necessary.” He added that a number of the
requests could also relate to auto- enrolment breaches. Auto-enrolment has brought a
lot more employers who have not really engaged with the regulator before under the watchdog’s spotlight, Mr Roberts noted.
We’ve seen cases where clients have effectively had someone working on it full time, which means that they are therefore
not doing their day job Samantha Brown, Herbert Smith Freehills
have to create, so there’s expense in that,” said Ms Brown, adding that “the sheer volume that might be requested will just cost money to deal with”. She said she had seen a request,
for example, that asked for certain company information – including a very broad range of documents– stretching back over 10 years. Information may be held in
different places and in a range of forms, so someone will have to spend time working out where all the different bits of information are before collating them. Once the broad categories of
information have been extracted, it will need to be reviewed and, changes – such as making sure it complies with data protection laws – may be needed. “Then you need to get it into a
form that responds to the questions the regulator has asked you,” Ms Brown said. “We’ve seen cases where clients
have effectively had someone – one of their team – working on it full time, which means that they are therefore not doing their day job. And that has a cost – management time has a cost,” she added.
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PHOTO: ISTOCK
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