On the go: Smart Pension's trustee has been fined by the Pensions Regulator for failing to report unpaid pension contributions to members and the watchdog.
Almost £900,000 of contributions from 498 employers were not collected or invested in the autoenrolment.co.uk mastertrust on behalf of members, while the trustee, EC2 Master Ltd, did not have a proper reporting system in place to comply with statutory requirements.
The trustee was fined £15,000 for the civil offence under the Pensions Act 1995.
It is the second such fine issued against a mastertrust, with embattled peer Now Pensions facing a similar sanction in February.
Smart Pension worked quickly to rectify the failures, according to the regulator, and reported employers to the watchdog to enable potential enforcement action to be taken.
Trustees have a legal duty to check that contributions are paid, and must report any failure to do so to both members and the regulator.
Nicola Parish, the regulator’s executive director of frontline regulation, said in a statement: “Smart Pension’s systems and processes were ineffective and the trustee’s failure to act on its responsibilities was unacceptable, but we are encouraged by the commitment of both to improving the way they work.”
“It is vital that workers can be confident that their contributions are being collected and invested properly so that their savings can grow,” she added. “They have a right to know if payments are not being made and we need to know so that we can investigate why it is happening."
The fine is a blow to Smart Pension, which has positioned itself as a market innovator. Last week it announced it was offering an employee benefits portal to small employers, and it has begun work on a default retirement product.
Andy Cheseldine, Smart Pension's independent chair of trustees, said nearly all the employers reported had now paid their contributions and pointed to the quick turnaround of the problem.
“Smart Pension now has a system in place which includes an automated ‘health check’, an algorithm which runs checks every day on every single employer to make sure they are keeping up with their payments,” he said in a statement.
He added: “We take our duties very seriously and what happened was not acceptable. However, we are confident that with this new system in place, this will not happen again.”
