Pension providers spared duty to police contributions by TPR
UK – Pension providers in the UK will not be required to check the accuracy of pension contributions after the regulator amended its code of practice, Pinsent Masons has suggested.
Commenting after the Pensions Regulator (TPR) published a revised version of its code of practice, the law firm's legal director Simon Tyler welcomed the emphasis on a proportionate and risk-based approach.
"The guidance suggests providers need only double-check the amounts of contributions paid if they identify a higher risk of material late payments or underpayments," he said.
However, he accepted that it was "crucial" that member confidence in auto-enrolment be maintained, and that monitoring contributions was part of maintaining such confidence – as long as cost-effective oversight were possible.
In a statement, the regulator stressed that employers would have the primary responsibility for guaranteeing the level of correct payments.
Charles Counsell, TPR's executive director for auto-enrolment, emphasised that all parties involved in the process – including members – had a role to play in monitoring the process.
He added: "Pension schemes should have in place a monitoring system that should be proportionate and risk-based. This process will help to ensure the correct flow of the right amount of money into members' pension pots."
TPR said the draft code had now been submitted to the relevant parliaments and that they were set to come into force from autumn this year.
The National Association of Pension Funds head of policy Darren Philp welcomed the changes, noting that the draft code had "raised some eyebrows" on publication last year.
"Ultimately," he said, "it is the employer's duty to pay the right contributions to pension schemes, and it is good that the Pensions Regulator recognises this explicitly."
He added that the risk-based approach would be important, as failure to pay contributions would be a bigger problem for some schemes than others.
Philp said further that while some responsibility was being shifted to trustees and scheme managers, the revised draft guaranteed that additional burdens would not be "excessive".