TPR’s new interview powers in the Pension Schemes Bill
For those wanting to get a good overview of the Pension Schemes Bill 2019 – 2021, you could do a lot worse than read the briefing paper published in the House of Commons Library.
If you managed to make it to page 32, you would see that it says the Bill contains “measures to improve TPR’s information gathering powers, enabling it to enter a wider range of premises and require individuals to attend an interview.”
Sandwiched between some commentary around “sanctions” and the new “pensions dashboard”, you would be forgiven for glossing over this brief statement and not giving it much further thought.
But I am using this blog to tell you that you shouldn’t skip over it so lightly. Indeed, with the prospect of the Bill becoming law by the end of the year, you might well experience these new powers first hand in the not-too-distant future and their impact might surprise, and perhaps even concern, you.
For some time now, TPR has said it needs to get better and quicker information in order to improve its regulation of pension schemes. It has been doing this through a variety of methods including annual scheme returns, notifiable events, whistleblowing reports, and 1-2-1 supervision and engagement. TPR has also not been shy in using its formal powers to require the disclosure of documentation (known as section 72 notices) when looking at exercising its scheme funding and anti-avoidance powers.
What are these powers?
But when the Bill becomes law, TPR will be able to compel anyone who TPR believes may have information relevant to the exercise of its functions (including trustees, employers and professional advisers) to attend a formal interview and answer any relevant questions. And the only legitimate reason to refuse to answer will be if legal professional privilege applies.
In the pensions context, we have seen the power of an interview through the inquiry by the Work and Pensions Select Committee – albeit they had added power because of their interviews being held in public. But TPR’s interviews will have their own added power through the penalties that might apply. Failure to comply with a request to be interviewed could result in TPR issuing a fixed or escalating penalty notice – a process that it has become entirely comfortable with through auto-enrolment. Whilst providing false or misleading information during an interview could result in a penalty of up to £1 million.
Sceptics might say that TPR has had a history of rarely using plenty of its powers, so why should this be any different. Well, not only has it pressed hard for these powers for some years now, but it also has the expertise and resource to use them. Within its Enforcement Directorate, TPR has a dedicated investigations team that is headed up by an experienced ex-FCA investigator who will have been familiar with similar powers that are used extensively in the financial services context.
What should you do?
So what should you do if you are asked, or compelled, to attend an interview with TPR? Well obviously, as you would expect me to say, obtain legal advice! Although it will generally be sensible to be co-operative, there will be a number of matters to carefully consider in any situation. For example – what is the context to the request? Might any answers you provide put you in breach of any confidentiality obligations, and might privilege apply? Do you have the benefit of any insurance that might cover the associated legal costs (as many trustee liability insurance policies do)?
The purpose of this blog is not intended to be alarmist. Rather, as the Scouts say, “Be prepared”.