On the go: The chief executive of the Pensions Regulator has assured MPs that despite its decision to pause enforcement activities, it will make exceptions for employers who treat its intervention as anything other than a temporary cash flow aid.
Quizzed by the Work and Pensions Committee on his temporary decision not to go after employers who fail to make contributions into defined contribution schemes, Charles Counsell said that the worst case of neglect will still be met with a stern response from TPR.
The watchdog is yet to see any significant decline in auto-enrolment contributions, and the majority of new starters are being auto-enrolled in line with legal requirements, he said in testimony to the committee on Tuesday.
“First of all, we wouldn’t typically use our powers around unpaid contributions. However, if an employer is deducting an employee contribution and not paying that over to the scheme, then we would take that seriously,” Mr Counsell told MPs.
“It is not that we would never use our powers at the moment. Where we see really serious failures, we absolutely would.”
Mr Counsell stressed that any missed contributions must be repaid, using the analogy of a mortgage holiday. Similarly, while providers now have 150 days instead of 90 days to report unpaid contributions, they must still do so.
“The second thing to say is that we do expect contributions to be made in the end. These are temporary, not permanent, easements, and those contributions should be made,” he said. However, he did not give a deadline for when shortfalls should be made good, saying that employers should agree a plan with their provider.
Opt-outs from members have not generally increased, except to a small extent at one provider, Mr Counsell revealed.
MPs on the WPC revealed their concerns about members falling prey to scammers or making bad decisions during the hearing, with several asking the regulator what it is doing to protect savers.
Responding, director of communications Liz Hickey said: “In particular, we are asking trustees to highlight to members what the current economic volatility might mean, particularly for those close to retirement, and to think carefully before switching funds.
“We are also incredibly mindful of the potential for scam activity. We know that scammers prey on uncertainty and that our members may be vulnerable to that.”
