Insight
Pensions: what's new this week - October 7, 2024
TPR publishes regulatory intervention report: The Meghraj Pension Scheme
The Pensions Regulator (TPR) has published details of its use of enforcement powers to secure funds for The Meghraj Group Pension Scheme. The Upper Tribunal confirmed a contribution notice (CN) for an amount in excess of GBP1.8 million against one director and TPR agreed a settlement with another director, following the extraction of funds from the scheme sponsor’s group in the form of a large cash payment to an entity outside the group. The scheme subsequently entered a Pension Protection Fund assessment period in October 2014.
In June 2020, the Determinations Panel agreed that CNs in the sum of GBP3,688,108 should be issued against two directors on a joint and several liability basis. The directors referred the matter to the Upper Tribunal but one case was settled prior to the hearing. In relation to the remaining director, the Upper Tribunal agreed with TPR that the director should pay 50% of the sum that was extracted from the group, plus an uplift to take account of the passage of time. The CN was issued in August 2023.
TPR’s regulatory intervention report highlights points that have been clarified by the Upper Tribunal’s decision. First, where material detriment is found, the question of what CN amount is reasonable is constrained only by the amount of the section 75 debt and there is no need to show the extent of any loss or the extent to which an act or failure to act has prejudiced the recoverability of all or part of the section 75 debt. In addition, the amount can be uplifted to reflect the passage of time since the act or failure to act in question – in this case, the uplift was calculated based on historic scheme investment return data.
Read the regulatory intervention report.
TPR: latest compliance and enforcement bulletin
TPR’s latest compliance and enforcement bulletin (for January to June 2024) provides statistics about its use of enforcement and other powers during the first half of this year.
Two fines were issued in relation to failures to publish climate change reports on a publicly accessible website. In the press release accompanying the bulletin, TPR highlights a point not directly related to these enforcement penalties, stating that it intends to have an increased focus on investment governance and that it may challenge trustees on ‘whether their climate reporting disclosures are the product of strategic decision making aimed at protecting savers from the financial risks of climate change, both now and in the future’.
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