The Pensions Regulator is targeting employers suspected of not complying with their workplace pension duties with in-person spot checks on a more regular basis for the first time since the start of the pandemic.

The Pensions Regulator (TPR) has confirmed that employers suspected of failing to meet their workplace pension duties are being targeted with in person spot checks as part of a compliance drive, which TPR says marks its return to large scale inspections following the removal of COVID-19 related restrictions.

Workplace pension reform

Since 2012, legislation has been in place requiring all UK employers to automatically enrol certain staff into a workplace pension scheme. The legislation places a number of obligations on employers including enrolling and re-enrolling those staff and paying a minimum level of contributions in respect of them.

TPR has oversight of the auto-enrolment regime and has published guidance and other helpful information to help employers comply with their duties. It is also responsible for investigating suspected cases of non-compliance and enforcing penalties where employers are found to be in breach of the auto-enrolment requirements.

TPR’s power of inspection

TPR has the power to carry out checks at employers’ premises to ensure they are complying with their auto enrolment duties, and until the COVID-19 pandemic struck, it exercised that power regularly. In its enforcement bulletin published for the period from July to September 2019 (the last issue to be published prior to the onset of the pandemic), TPR report that it had carried out 1,769 inspections to date, with 67 of those having taken place over that three month period. The number of inspections in the first quarter of 2020 reduced to 37 as the effects of the pandemic started to spread across the country, and once lockdown hit they ceased almost entirely, with only one inspection having been carried out in the period to December 2021 according to TPR’s published data.

Now that the pandemic has subsided and the restrictions have been lifted, TPR is putting boots back on the ground. In its press release, TPR did acknowledge that most employers have continued to meet their responsibilities despite the turmoil of the last two years, but has made it clear that where an employer is failing to ‘do the right thing’ it won’t hesitate to take action to protect savers. TPR is no doubt keen to see with its own eyes that employers are doing what they should be doing and that nothing has slipped through the cracks in the time that TPR (like the rest of us) was confined to its virtual office.

TPR says that spot-checks will be carried out across the UK in the coming months, but makes particular mention of Greater Manchester, Nottingham, Greater London and Belfast. Employers in those areas who are not sure whether their pensions practices have been up to scratch in the last couple of years could well expect a knock at the door in the not-too-distant future.

What to do if TPR knocks at your door

If TPR requests entry to inspect premises for compliance with workplace pension duties, the best course of action for employers is to comply with TPR’s requests and to seek legal advice as soon as possible. It is reasonable to ask the inspector to show their certificate of appointment to prove they are authorised to be there, but anyone who refuses to grant entry or otherwise hinders the inspection could be guilty of an offence and be fined £400 (or more if the fine is not paid within a specified deadline).

It is important for employers to understand their disclosure duties in the event of an inspection. Inspectors have the power to speak to any person present at an employer’s premises during their visit to help them establish whether the employer is complying with its duties. They can also require those people to provide them with documents which they can then copy (or they can take the original if there is a risk it might be interfered with) and they can access and copy electronic information.

Anyone who knowingly alters, hides, or destroys documents that they are required produce during an inspection without a reasonable excuse for doing so, or who knowingly or recklessly provides false or misleading information, could be guilty of an offence and face an unlimited fine or up to two years in prison (or both).

What does this mean?

It’s not all doom and gloom. As well as looking for evidence of non-compliance, TPR says it will use the inspections as an opportunity to gather insights into employer behaviour and identify common mistakes. That information could help inform TPR’s guidance to better equip employers to carry out their auto-enrolment duties in the future.

TPR’s focus in carrying out this inspection drive appears to be ensuring compliance, rather than penalising employers, and it says that in most cases it will ‘work on site with employers found to be non-compliant to help get them back on track’.