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Enforcement strategy

Strategy setting out our approach to enforcement in all aspects of our work except automatic enrolment.

Published: 25 October 2022

Introduction

  1. The Pensions Regulator (‘the regulator’) was established under the Pensions Act 2004 as an executive non-departmental public body, sponsored by the Secretary of State for Work and Pensions, to regulate workplace pensions.
  2. Our enforcement powers under pensions legislation and more broadly are some of the tools we can use to help ensure the safety and security of every saver’s pension benefits and instil confidence in pension saving.
  3. This strategy sets out our approach to enforcement in all aspects of our work except Automatic Enrolment (PDF, 155KB, 27pages). 

Our approach

  1. Our regulatory approach is guided by our statutory objectives. Our Corporate Strategy sets out how we regulate as a whole. We are risk-based and proportionate, with a focus on enhancing and protecting saver outcomes rather than being prescriptive in our approach. Enforcement is one way we achieve our overall strategic aims and goals, particularly in the areas of security, governance, and decision making.
  2. We are bold and effective in how we enforce. We clearly set out our expectations to the market and promote positive behaviours through our codes of practice and policies. Where those expectations are not met, we act decisively and take enforcement action where needed. Any enforcement action is proportionate to the risk and harm to the saver identified. More detail on the risk and harm factors we take into account can be found in our enforcement policy.
  3. We conduct our enforcement action efficiently and effectively to improve saver outcomes, without imposing unnecessary or unreasonable burdens. We are transparent about how we operate, to provide clarity to parties we engage with during our enforcement action. Any enforcement action we take is targeted, measured and evidence based.
  4. In our enforcement action, where required, we take into account the ‘Regulators Code’ and the principles of good regulation as set out in the Legislative and Regulatory Reform Act 2006. The five principles of better regulation are: proportionate, accountable, consistent, transparent, and targeted (PACTT). We track and evaluate our performance against these principles through our key outcome indicators set out in our corporate plan.
  5. Our regulatory approach provides a clear, concise and transparent explanation of our general approach and how we take into account PACTT.
  6. Our additional considerations in our criminal cases are set out in our prosecution policy. 

Our aim

  1. Through a range of interventions, we aim to achieve good outcomes for savers through the reduction of risk and by preventing or mitigating harm. In working to achieve this aim, we are a regulator which supports an innovative and collaborative approach, while also prioritising our resources based on risk. Where appropriate, we will work together with individuals, schemes and employers to drive compliance and protect savers, for example see Supervision.
  2. We are able to adapt our approach to respond to an evolving pensions landscape by considering a broader range of measures to address a wider set of risks and harm that may materialise.
  3. Sometimes an appropriate outcome for savers cannot be achieved by working together with individuals, schemes, and employers, or the risk of harm is too great or immediate, or behaviours are egregious. In those situations we may decide enforcement action is necessary, and we will use our enforcement options, with the aim of securing one or more of the following outcomes:
    • Prevention: the person may need to take steps to address and prevent repeating the action that contravened pensions legislation, or other duties.
    • Remedy: the person may need to provide funding or other financial support to the pension scheme or take steps to put things right and correct the contravention of pensions legislation or other duties.
    • Restoration: the person may need to restore loss or detriment caused to a scheme and/or its savers, by putting them into the position they would have been in had the contravention of pensions legislation or other duties, or the act or conduct which caused the loss or detriment not occurred.
    • Deterrence: even if a contravention of pensions legislation or other duties can be put right or remedied, a sanction may be appropriate to punish the person responsible. This acts as a deterrent to change the future behaviour of not only that person, but also the wider pensions industry.

See enforcement outcomes. 

Enforcement options

  1. In our enforcement policy, we set out the range of enforcement powers open to us, which we may use to achieve the above outcomes and the factors we take into account when deciding whether to take enforcement action.
  2. The option(s) we choose will depend on the level of risk and/or harm identified, and the outcome(s) sought. For example, in the case of a pensions scam, where fraudulent behaviour affects a significant number of members, we are likely to (i) try and prevent further issues by appointing an independent trustee, (ii) deter similar behaviour through a criminal prosecution for fraud, and (iii) seek restoration through proceedings under the Proceeds of Crime Act 2002. However, in a case where we have concerns about the level of knowledge and skill of an inexperienced trustee, where a risk exists but no actual harm has been caused, we are likely to use our preventative governance power of appointing an independent trustee.
  3. Where appropriate we work closely with partner agencies, law enforcement and other regulatory bodies to achieve enforcement outcomes, such as, for example, the Insolvency Service, City of London Police, the Serious Fraud Office, and the Financial Conduct Authority. This includes sharing intelligence with these entities under our legal gateways.
  4. We are a member of the Pension Scams Action Group (PSAG), which is a task force made up of government departments, regulators, financial services bodies, and criminal justice agencies to disrupt and prevent scams. If we identify unacceptable behaviour which falls outside of our regulatory remit, we will make a referral to the relevant agency/body so that they can investigate the matter. Where our powers may overlap, we will work together to ensure that the best possible outcome is achieved. For further information please see our Scams Strategy.

Publication

  1. As set out in our enforcement policy, we put great emphasis on preventive actions, providing guidance, and helping to encourage and build good practice in collaboration with the regulated community. We will normally publish the outcomes of our enforcement activity to raise awareness of our expectations and the consequences when those expectations are not met. See: our how we publish information about cases. This helps drive changes in behaviour, improve standards and promote good member outcomes.
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