What to do if the Pensions Regulator asks for information

What are TPR’s information gathering powers?

TPR already has significant legal powers to demand information, but tends to use these infrequently (and most commonly in the context of enforcing auto-enrolment duties). TPR may also ask for follow-up information from trustees or employers as a result of various formal and informal mechanisms, including:

• whistleblowing reports (for example, a report made by a person who is required to report breaches of the law, or a complaint by an employee or scheme member);
• information otherwise provided via a legal reporting requirement (such as the notifiable events framework, scheme funding reporting requirements, and the annual scheme return);
• press reports;
• responses to questionnaires as part of a specific regulatory initiative;
• TPR’s relationship supervision programme.

You can read more about reporting requirements in our briefing When to approach the Pensions Regulator.

Proposed extensions to TPR’s powers

The Pension Schemes Bill contains proposals¹ to strengthen TPR’s regulatory powers, including:

• a new framework requiring advance notice of certain transactions (known as a ‘declaration of intent’), and increasing the potential penalty for a breach of this requirement and the existing notifiable events framework to a GBP1 million cap; and
• changes to information-gathering powers, including a new standalone interview power; extending the ability to inspect premises (including permitting TPR to inspect premises in connection with a ‘moral hazard’ investigation); and new sanctions.

The table at the bottom of this page gives an overview of TPR’s current powers, together with key proposed changes (and penalties) under the Pension Schemes Bill.

Receiving an information request: guidelines and practical tips

Not all information requests are the same, but there are some general principles to follow if you receive a request, as well as practical tips in connection with informal requests, section 72 notices, and interviews.

General principles

• Ensure that you understand the context in which TPR is seeking information. For example, is TPR seeking to identify non-compliance with legal requirements or regulatory standards, gathering information in connection with its moral hazard powers, or is it asking for information to learn about common or best practice in the industry?
• Take legal advice promptly. Start from the position that you should engage with TPR and adopt a collaborative approach (to the appropriate extent). If TPR is using its legal powers to demand information, you should only resist disclosure based on legal advice.
• Ensure you understand the implications of the request, including the potential consequences of providing inaccurate information, and (for serious matters) how information provided could be used in subsequent proceedings.
• Check if there is anyone to whom the request should be disclosed (for example, in-house legal).
• Check insurance cover to see if any associated costs would be covered (and in what circumstances).
• Seek advice on whether any information should be redacted or withheld (for example, for data protection reasons, or in relation to communications with legal advisers).
• Keep a record of any information or documents shared with TPR.

Informal requests

• If you are asked to provide information informally over the phone, ask for the questions to be submitted in writing.
• If you receive an informal written request for information, seek advice before you reply. In some circumstances, it may be advisable to decline the request unless a formal legal demand is issued (rather than providing information voluntarily) – this will depend on the context. In other cases, voluntarily providing information at an early stage may be appropriate, as it can help TPR to understand the context and bring matters to a close.

Formal section 72 notice

• Check whether you, as the named recipient, hold the information or documents requested.

Seek advice on:

• whether the notice has been properly issued and what it covers – including whether you could seek to limit the scope of the notice, and any material that does not need to be provided; and
• how long it would take to search for and identify the relevant documents/information (and whether this means you are unlikely to be able to comply with the request by the deadline). You may need to engage with TPR about a revised deadline.

Interviews

• An interview with TPR should be taken very seriously – seek advice immediately, and ensure that you invest sufficient time in preparing for the interview and in knowing what to expect.
• If you are to be interviewed under caution, specialist advice will be required.

You should also:

• consider who should attend with you (such as in-house or external legal advisers), depending on the circumstances. Ensure someone will take an attendance note as your own record;
• ask for a list of questions to be provided in advance; and
• consider reviewing relevant policies, procedures and contemporaneous records (to refresh your memory).

Case studies

In one case, trustees received a questionnaire from TPR as part of its ‘fair treatment’ regulatory initiative due to TPR’s concern that the sponsoring employer was paying out disproportionately high dividends at the expense of deficit repair contributions. TPR reported that the subsequent regulatory engagement led to an additional GBP15m lump sum being paid into the scheme (front-end loading the recovery plan).

In another case, the trigger for TPR engagement was some routine questions about valuation processes. When the trustees could not answer these, TPR raised governance concerns via a questionnaire. Based on the trustees’ responses, TPR opened an investigation, informed the trustees what its concerns were (including conflicts issues and a lack of trustee knowledge and understanding) and set out its expectations for improvement. In this case the trustees voluntarily agreed to an improvement plan, so TPR’s enforcement powers were not exercised.

Table of TPR investigatory powers

This table is not a comprehensive summary of TPR’s existing powers/sanctions or the proposed changes. Some of TPR’s powers are exercised by the Determinations Panel – you can read more in our guide The Pensions Regulator’s powers and how they are exercised.